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Jakarta Post

China'€™s train proposal in favor

  • Nadya Natahadibrata and Raras Cahyafitri

    The Jakarta Post

  /   Wed, August 12, 2015   /  04:20 pm

The fierce diplomatic competition between China and Japan to win Indonesia'€™s high-speed train tender is reaching its climax and China has the upper hand, a minister hinted on Tuesday.

After a meeting with the chairman of China'€™s National Development and Reform Commission, Xu Shaoshi, on Tuesday, the National Development Planning Agency (Bappenas) chief Andrinof Chaniago said that the government would consider a proposal that did not involve the state budget.

Andrinof said that unlike the previous feasibility study submitted by the Japan International Cooperation Agency (JICA), China reassured the government that the Jakarta-Bandung high-speed railway project remained viable without any state support.

'€œAs for the land acquisition, we will further discuss it [whether it would require state financial contributions or not], but [the figure] will not be significant,'€ Andrinof told reporters.

Japanese sources who closely followed the competition from the very beginning insisted that their government had offered much better terms and condition and much safer and more sophisticated railway technologies to Indonesia.

'€œInitially, China'€™s offer may look cheaper and better, but we are very confident with our track record in this business,'€ a Japanese official said in a recent conversation.

Soon after his appointment as the head of Bappenas last year, Andrinof stated that the high-speed railway project was unrealistic and that the government would concentrate on the development of standard railways, seaports and airports.

'€œ[China] has looked at the other feasibility study. Therefore they offer this new proposal and lots of [the elements in the study proposed by China] have been well adjusted,'€ he continued.

The minister now argued that as long as no state funds were allocated, the government would give a green light for the project.

'€œThe project will not be a priority if it involves the state budget,'€ said Andrinof, who caused a diplomatic uproar early this year when he wrote on his Facebook page that Japanese Ambassador to Indonesia Yasuaki Tanizaki threatened him over the economic consequences Indonesia has to face if Japan lost the railway project. He later softened his stance.

Andrinof said that the total investment to construct the high-speed railway proposed by China reached US$5.5 billion with an interest rate of 2 percent and a grace period of 10 years.

Meanwhile, Japan had offered a 40-year loan at a 0.1 percent interest rate with a 10-year grace period, according to Reuters.

'€œThe government decision will be announced in two weeks'€™ time and we will put a number of aspects into consideration,'€ Andrinof said.

Under China'€™s proposal, the bullet train will run 350 kilometers per hour on a 150-km railway with eight stations including Manggarai and Gambir in Jakarta, which Xu claimed would interconnect with the planned light railway in Jakarta.

Earlier reports said the JICA had completed its feasibility study of the project some time ago. Analysts estimated the project would cost at least Rp 60 trillion.

According to JICA, the investment to construct the railway should be partly funded by the state. In JICA'€™s view, 74 percent of the budget should be funded by a new state-owned enterprise that will operate the rail network, while the remaining 16 and 10 percent should come from the state budget and the private sector, respectively.

JICA Indonesia Office representative Daisuke Oura said that the agency understood that the Indonesian government was preparing a beauty contest to decide on the high-speed railway project.

 However, he declined to comment regarding the study submitted by the Chinese government.

'€œThe Japanese government has a long history of cooperating with the Indonesian government since 1964. We can assure the safety and also the punctuality of the project and we also offer a reliable system,'€ Oura told The Jakarta Post.