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Indonesia’s high-speed train connecting Jakarta to Bandung, 150 km to the southeast, is finally to start operating commercially in October after more than four years of delays. One of the major global setpieces of China’s vaunted Belt and Road Initiative, it will be the first fast train in Southeast Asia although its cost has ballooned to US$7.3 billion and has raised gloomy predictions that Indonesia is snared in a Chinese debt trap.
The fast train’s problems and promises thus in many ways exemplify many of the global issues of the BRI, as China’s grandiose globe-spanning initiative is known. It is bringing world-class transportation to an area where many may be too poor to use it and while many feel they don’t need it, arriving four years late at a 20 percent cost overrun that is to be borne not by China but by Indonesia.
Nonetheless, the media have been euphoric ahead of the train’s launch. A spectacularly beautiful train, it has reached 350 km/hour in trial runs, the maximum speed when operating on a 142.3 km line. The trains will serve the public free of charge for three months starting in August, before actually operating commercially in October.
The Jakarta-Bandung Fast Train Megaproject (KCJB), as it is formally known, is being implemented by PT Kereta Api Indonesia China (KCIC), an International joint venture between the China Railway Engineering Corporation and a consortium of Indonesia’s State-Owned Enterprises (BUMN).
The Ministry of Transportation says the train will start to operate in August despite a report the ministry and three consultants suggested full operation be delayed to next January according to an internal document titled Progress Update Report, dated May 14, 2023. The document also stated that KCIC wanted a certificate of full operational feasibility for the line even though the station had not been completed.
KCIC Corporate Communications Manager Emir Monti said the project construction is almost 100 percent complete. “Currently, the construction of KCIC has reached 94 percent. We are continuing to build and improve facilities and infrastructure, as well as testing fast trains.”
An engineering marvel bogged down by acquisition costs and local issues, approximately 58 percent of the high-speed line rests on elevated structure, passing through 13 tunnels spread across several points. In operation, it will pass through four stations, operating 68 trips per day from 5 am to 11 am.
Dubbed the CR400 AF, it is the latest generation of China’s fast train types. It consists of eight cars with a capacity of 1,283 passengers. Even though the train is very fast, it is able to optimally dampen vibrations and sounds. The train will cover the 142.3 km from Jakarta to Bandung in just 36 minutes for a direct trip, up to 46 minutes with a stop at each station.
However, ahead of the launch, the project was criticized because the last station is not in the city of Bandung, but in Cimahi, which is about 25 km from it. The government reasoned that the fast train project would later be continued to the City of Surabaya in East Java and that passengers who want to go to Bandung take a feeder train with an estimated travel time of 15 minutes.
The fast train development project has reaped controversy ever since the planning. In 2016, Indonesia and China signed an infrastructure agreement for the construction. But at that time, the project was opposed by Minister of Transportation, Ignasius Jonan who said there is no need for a mode of transportation such as the fast train for the short route between Jakarta and Bandung, which is only about 150 kilometers.
The minister, the person in charge of the railway sector, refused to issue a permit for the construction because it was considered that a number of regulations had not been complied with, especially regarding the concession period.
China won the KCJB development project even though Japan had already conducted a feasibility study. In China’s proposal, the project value was set at US$5.13 billion, there was no government guarantee or financing from the state budget and tariff subsidies, and cost overruns were the responsibility of the joint venture company (JVC).
The discarded Japanese proposal stated that the bid value was US$6.2 billion, that government guarantees, financing from the state budget and tariff subsidies were necessary, and that cost increases would borne by the government. With lower costs and no funding from the state budget, China won the project. China later corrected the project cost to US$6,071, projected to start in 2016 and targeted for completion in 2019.
At that time, President Joko Widodo emphasized that the construction would not use state budget, but consortium funds. However, in 2022, the government disbursed a budget of Rp 4.1 trillion through State Capital Investment (PMN) for PT Kereta Api Indonesia to continue the development of the delayed project. The government reasoned that project construction had to be stopped to focus on handling Covid-19 and would only resume in mid-2021 after the pandemic cases began to subside. The ballooning project cost has also occurred due to rising prices for key components including iron and steel, as well as supply chain disruptions.
The two countries have agreed on an increase in costs of up to US$1.2 billion, with 60 percent being borne by Indonesia and 40 percent by China. Thus, the cost of the project increased from US$6.071 billion to US$ 7.3 billion. Indonesia has borrowed US$560 million from the China Development Bank (CDB) to cover the cost after tough negotiations regarding loan interest which China set at 3.4 percent of the total loan, higher than the government’s expectation of around 2 percent. Even though the costs have increased, it is too late for Indonesia to stop the project.
Coordinating Minister for Maritime Affairs Luhut Binsar Panjaitan in his recent statement said the government will start discussing plans for the continuation of the fast train from Bandung in West Java to Surabaya in East Java. It is hoped that the high-speed train will not only shorten the travel time for passengers, but also have an economic impact on residents and the transfer of technology.
However, many parties warned the government must learn from the experience, which they say has harmed Indonesia. The Bandung-Surabaya route is much longer than Jakarta-Bandung, so it is likely that the costs required will also be many times higher.
“We don’t want things that happened during the construction process of the Jakarta-Bandung High Speed Train to happen again, such as breaches of contract agreements, which were initially purely business to business and did not use state budget funds, but in the end the government had to use state budget funds because there was a significant increase in costs,” said member of The House of Representatives Andi Iwan Darmawan Aras.
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