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Jakarta Post

RI sends envoys to Japan, China to discuss train project

  • Ina Parlina and Dylan Amirio

    The Jakarta Post

Jakarta   /   Tue, September 29, 2015   /  05:29 pm

Indonesia is keeping open the possibility of Japan working on a Jakarta-Bandung semi-high speed train project amid speculation that the government is leaning toward China'€™s proposal in a race between the two Asian giants to win the bid.

Cabinet Secretary Pramono Anung revealed on Monday that President Joko '€œJokowi'€ Widodo had sent National Development Planning Board (Bappenas) chief Sofyan Djalil to meet Japanese Prime Minister Shinzo Abe on Monday to tell him that Indonesia would not allocate any state funds for the project. Japan'€™s proposal requires a viability gap fund from the government.

The President has also appointed a special envoy to meet with the Chinese government, although it remains unclear who it is and when the discussion will take place.

'€œLast night [on Sunday evening], the President sent a special envoy, Sofyan Djalil, to meet Prime Minister Shinzo Abe, and also ordered a special envoy to meet with the Chinese government,'€ Pramono said at the State Palace on Monday.

The announcement was made following an earlier statement by State-Owned Enterprises Minister Rini Soemarno that implied that China might win the right to carry out the project as she reiterated the government'€™s preference to not allocate any state funds for it.

While Japan'€™s proposal requires a viability gap fund from the government, China'€™s proposal listed no requirement of state funds, although the government would have been involved through a consortium of state-owned enterprises.

China has submitted its own feasibility study to the President, claiming to offer a more competitive price than its Japanese counterpart. In response, a new Japanese proposal offered additional terms, including lower viability gap funding for the government.

According to Pramono, Sofyan would address Tokyo about the three principles set by Jakarta in terms of the semi-high speed railway project: '€œIt is our decision: business-to-business scheme, using no state budget and no government funding for viability gap.'€

'€œIn the near future, of course the official steps to be taken will be announced,'€ Pramono added.

According to Pramono, the speed would also be lowered from a previous plan for a high-speed train project of up to 350 kilometers per hour. '€œThe speed indeed will be lowered. What the speed will be is still being calculated,'€ he said.

Earlier on Monday at the State Palace, although Rini did not specifically mention that China had attained the final right to undertake the project, she hinted that China'€™s proposal met the requirements set by Jakarta.

'€œIf we look at the two proposals we received, from Japan and China, China'€™s proposal meets the notion that the government would not be required to dish out loans or funds from the state budget, while the Japanese proposal doesn'€™t,'€ Rini said.

'€œThe government'€™s requirements are very clear and because the project will be handled by state-owned enterprises, we will only follow what'€™s asked of us.'€

Rini added that the railway would most likely have a speed below 250 kilometers per hour.

Previously, members of the government, including Coordinating Economic Minister Darmin Nasution, mentioned that the government would scrap plans for a high-speed railway, in favor of a semi-high speed railway due to its efficiency and lower costs.

The project will be conducted as a strictly business-to-business project, thus eliminating the possibility of state-owned enterprises working on the project attaining additional state capital injections.

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