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Jakarta Post

Govt in no rush in high-speed train bid selection

The government has decided to delay the announcement of the country’s first high-speed railway project winner, as the evaluation team required additional time to assess the proposals submitted by China and Japan

Ina Parlina and Nadya Natahadibrata (The Jakarta Post)
Jakarta
Thu, September 3, 2015

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Govt in no rush in high-speed train bid selection

The government has decided to delay the announcement of the country'€™s first high-speed railway project winner, as the evaluation team required additional time to assess the proposals submitted by China and Japan.

Cabinet Secretary Pramono Anung told reporters on Wednesday that President Joko '€œJokowi'€ Widodo '€” who had previously been expected to announce the winner this week '€” would make a decision based on an assessment by independent consultants and a team of cabinet ministers.

'€œThe time to review the assessment is extended until Sept. 7, to ensure a fairer process,'€ Pramono told reporters.

Both China and Japan have high-speed trains connecting their major cities and the two Asian economic giants are now in fierce competition to adopt the technology to connect Jakarta and the country'€™s fourth largest city Bandung in West Java.

Later that day, Coordinating Economic Minister Darmin Nasution held a meeting with a team of cabinet ministers and independent consultants from Boston Consulting Group at his office to seek their final recommendation regarding the project.

After the meeting, Darmin said that the independent consultant considered four factors in both proposals, namely the government'€™s commitment in the project, technology, socio-economic impacts as well as the project plan.

'€œThe consultant emphasized the respective track records and experiences. China and Japan have presented different proposals. China excels in the socio-economic aspect, while Japan excels in its track record,'€ Darmin said.

'€œHowever, they only delivered their recommendation. Based on the [independent consultant'€™s] recommendation, we will hold further discussions and formulate the final decision,'€ he continued.

Darmin was however reluctant to announce the team'€™s recommendation, saying that he would firstly deliver it to the president on Thursday.

State Enterprises Minister Rini Soemarno, who attended the meeting, said that should her ministry be given the authority to decide the project winner, she would opt not to involve the state budget.

'€œIf we were given the trust to construct the high speed train, all investment should come from a consortium of state enterprises in partnership with the winner. So, no cost will be placed on the government,'€ Rini told reporters before the meeting.

Rini said that the consortium would comprise state-owned construction company Wijaya Karya (WIKA), train operator Kereta Api Indonesia (KAI), toll operator Jasa Marga and plantation company PTPN VIII.

Meanwhile, Transportation Minister Ignasius Jonan said that the ministry would recommend the proposal that paid greater attention to safety, even if the cost was higher.

'€œSafety [should be a priority], even though the cost is higher, because safety cannot be measured in terms of cost,'€ Jonan said.

Japan had been the first to conduct a study on the feasibility of a high-speed railway, which was initially planned to connect Jakarta and Surabaya.

Earlier this month, China submitted its own feasibility study to the president to build a bullet train, claiming to provide a more competitive price and detailed financial plan.

Following the submission of the study by China, Hiroto Izumi '€” a special advisor to Japanese Prime Minister Shinzo Abe '€” paid a visit to the president, offering additional terms in Japan'€™s high-speed train proposal during his meeting to the State Palace.

Izumi claimed that Japan wanted to help Indonesia develop a high-speed railway and place it under Indonesian ownership and management.

The new Japanese proposal offers additional terms, including lower viability gap funding for the government.

However, Jokowi seems to oppose this idea and he has previously stated that no state funds should be used to finance the development of the country'€™s first bullet train.

The Chinese proposal, on the other hand, forecasts lower cost would be required for the project. Furthermore, the forecast states that the project could be completed within three years.
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