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Jakarta Post

High speed rail grinds to halt

  • Farida Susanty

    The Jakarta Post

Jakarta   /   Wed, January 27, 2016   /  06:07 pm

Five days after the ceremony to celebrate the ground-breaking of the Jakarta-Bandung high speed railway project, the government has changed its mind, saying that construction cannot proceed as a result of unresolved issues and incomplete paperwork.

Transportation Minister Ignasius Jonan confirmed on Tuesday that he had not issued the building permit as the company developing the railway, PT Kereta Cepat Indonesia China (KCIC), had not submitted the required documents.

The ministry has not issued the concession agreement either, because it is still negotiating a variety of sensitive issues with the company.

'€œWe are very strict [on this] because this is the first time we'€™ve conducted this kind of project, and we are not done with the evaluation,'€ he said at a hearing at the House of Representatives on Tuesday.

Jonan said the ministry was still negotiating the concession agreement with KCIC, which would stipulate the risk of default and the duration of the concession.

'€œWe want to ensure that if the project'€™s development fails in the middle of construction, the government will not be burdened by it,'€ he said.

He said that among the requirements from the ministry was that KCIC restore everything to its initial condition if the railway was not built for whatever reason.

Jonan said he did not want to repeat the case of the problematic Jakarta monorail project whose ground-breaking in 2004 was attended by then president Megawati Soekarnoputri.

Construction of the monorail project stopped following disagreements between the city and project operator PT Jakarta Monorail.

The company was said to have failed to fulfill at least 15 requirements by the city, including a business plan and a bank guarantee of 5 percent of the project'€™s total investment.

The problems, and doubts about the company'€™s ability to fund the project, led to the project'€™s cancellation, leaving unfinished concrete pillars in several locations in the city.

Jonan stated the concession duration for the high-speed railway would be 50 years, and that after it was over, the company would have to hand the project over to the country, debt-free and properly functioning.

According to Jonan, the ministry was also still awaiting a hydrology study, among other documents, required for the issuance of the building permit.

Previously, the ministry'€™s director general of railways Hermanto Dwiatmoko said the ministry had not even issued the building permit for the first 5 kilometers of the railway.

'€œWe still haven'€™t received the required documents. There are even a lot of documents in Chinese. How can we even evaluate them?'€ he said, adding that the railway infrastructure operational permit had also to be issued first before the building permit could be issued.

'€œThey want us to issue it in a day. We can'€™t do that.'€

The ministry'€™s data cited the lack of a development design, technical illustrations, field data and specifications as the missing documents among the 11 documents needed for the issuance of the building permit, in accordance with Ministerial Regulation No. 66/2013.

President Joko '€œJokowi'€ Widodo pushed ahead with the ground-breaking for the flagship project between Indonesia and China on Jan. 21 despite the permit issues.

Jonan was not present at the event, explaining that he was still working to finish the permits needed for the ambitious project.

In August last year, Jokowi also witnessed the ground-breaking of the 2x1,000 MW coal-fired power plant in Batang, Central Java, which has been touted as the largest power plant in Southeast Asia.

The president went ahead with the ceremony despite incomplete land acquisition for the mega project.

Meanwhile, KCIC has so far received track route permits, a railway transportation firm permit, an environmental impact analysis (Amdal) and toll-road land use permit, among others, from various ministries, including the Public Housing and Public Works Ministry.

The railway, connecting Jakarta and Bandung, West Java, is expected to run trains as fast as 350 kilometers per hour. Construction has been slated to begin this year, with trains operating in early 2019.

The investment required has been estimated at US$5.5 billion, 75 percent of which is being covered by loans from the China Development Bank.

The firm says it needs to procure at least 600 hectares of land for the project.

Hermanto said the ministry expected to issue the concession agreement and the railway infrastructure operational permit on Thursday and Friday, consecutively, if KCIC submitted the required documents.

Meanwhile, the firm has been unable to acquire the rail facilities operational permit, because of a shortfall in the capital requirement, with Rp 1.1 trillion ($79.2 million) recorded of the required Rp 1.25 trillion.

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