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Luhut brings back deals on railways, industrial park from Beijing trip
Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan's visit to Beijing scored some deals with China on the Jakarta-Bandung high-speed rail and the development of an industrial park in North Kalimantan.
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Construction continues on the Sepaku Semoi Dam in North Penajam Paser, East Kalimantan, as seen in this aerial photo taken on Feb. 21. According to Zulyadi, head of the Sepaku Semoi Dam project task force, work on the dam was will be complete by April 2024. (Antara/Indrianto Eko Suwarso)
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oordinating Maritime Affairs and Investment Minister Luhut Pandjaitan's three-day visit to Beijing until April 6 concluded with agreements with China, including the Jakarta-Bandung high-speed railway and the development of a green industrial park in North Kalimantan.
Luhut said on Monday both countries had agreed on a US$560 million loan from China Development Bank (CDB) that will bear some part of the $1.2 billion cost-overrun plaguing the high-speed railway project, which figure also concluded in the visit after months unresolved discrepancy between the two.
The rest of the cost will be financed partly by equity in PT Kereta Cepat Indonesia China (KCIC), the consortium responsible for the project.
Despite the loan agreement, Luhut sought to negotiate further, aiming to lower the interest rate to around 2 percent, almost half the prevailing figure that China had agreed on.
“The government will continue to negotiate the loan tenure and interest rate. CDB has agreed to lower the interest rate from 4 percent to 3.4 percent, but we want lower interest rates,” he told reporters in Jakarta, saying that the negotiation is targeted to finalize “in the coming weeks”.
Read also: Analysis: RI-China reach agreement on Jakarta-Bandung HSR cost-overrun
The loan would be given to railway company PT Kereta Api Indonesia, which heads the PT KCIC consortium. Septian Hario Seto, undersecretary at the Coordinating Maritime Affairs and Investment Ministry said discussions on the loan guarantee are still underway.
