(Bloomberg/Tomohiro Ohsumi)The governmentâs decision to scrap the high-speed train project will not have a significant impact on current and future investment from China and Japan
The government's decision to scrap the high-speed train project will not have a significant impact on current and future investment from China and Japan.
'There are currently many investment projects in Indonesia carried out by China and Japan, including Japan's Mitsubishi plant and the seaport development as well as China's electricity and infrastructure projects,' international business and politics expert Aknolt Kristian Pakpahan told the thejakartapost.com on Saturday.
Aknolt added that, according to President Joko 'Jokowi' Widodo's development plans, the high-speed train is not a main priority.
Jokowi's main priority is developing infrastructure outside the island of Java such as in Kalimantan, Papua, Sulawesi and Sumatra.
'Amid current economic conditions and the weakening of the rupiah, the state has a limited budget to be allocated to investment projects. So the government has to make decisions based on our country's development priorities,' he added.
The government announced Friday that the country's high-speed train project worth billions of dollars will be scrapped due to technical and financial reasons.
According to Coordinating Economic Minister Darmin Nasution, the project was not effective for such a short distance, only 150 kilometers. The government may develop a medium-speed train that would reach maximum speeds of 200-250 kph.
Darmin said that the medium-speed train was 30 to 40 percent less expensive than the high-speed train.
Proposals from Japanese and Chinese investors had estimated that the project would be worth up to US$6 billion. Jokowi reportedly said that the capital and equity arrangements in the proposals from both Japan and China were a serious burden on the state budget. (edn/kes)(++++)
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