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Jakarta Post

Minister Rini upbeat over high-speed rail project

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Mon, February 1, 2016   /  03:35 pm
Minister Rini upbeat over high-speed rail project

State-Owned Enterprises Minister Rini Soemarno (pictured) has guaranteed that Kereta Cepat Indonesia China (KCIC), the company handling the Jakarta-Bandung high-speed rail project, will abide by its commitment not to request financial support from the state budget or demand a government guarantee. (kompas.com/Achmad Faizal)

State-Owned Enterprises Minister Rini Soemarno is confident that Indonesia'€™s first high-speed rail project, which, despite covering less distance, is costing more than a similar project in Iran, will not end badly. Both projects are being handled by a Chinese state company.

The Regional Representatives Council (DPD) has urged the government to delay the 100-kilometer rail project, the cost of which reaches US$5.5 billion or almost twice that of the Tehran-Isfahan project, which is costing $2.7 billion for 400 km.

"China has built 18,000 kilometers of high-speed rail, the only country in the world to do it at that pace [..] We have a team overseeing the project that has already given a report to me. I examined it carefully before taking the decision," she said in Jakarta as quoted by Kompas.com on Saturday.

Rini guaranteed that Kereta Cepat Indonesia China (KCIC), the project developer, would not break its commitment not to request financial support from the state budget or demand a government guarantee.

"From the beginning, we have promised that the project will not ask for government guarantees, and will not need state budget support. That'€™s our commitment. I am the SOE minister, and it would not be right if I allowed an SOE to break its commitment," she said.

Rini explained that KICI'€™s sole request was an assured concession of 50 years, adding that China would not take over the project, as Indonesian state-run companies hold a 60 percent share in KCIC while China'€™s company holds 40 percent.

She admitted that the China Railway Engineering Corporation (CERC) was building the Jakarta-Bandung and Teheran-Isfahan projects at different costs, but insisted that the Indonesian project was different, as the project currently underway in Iran was not high-speed rail.

'€œPlease, they'€™re not the same thing. Our project is very different,'€ she said.

The Chinese Embassy in Jakarta, in response to Vice President Jusuf Kalla'€™s questions, stated that CERC'€™s $2.7 billion investment in Iran did not represent total investment in the project, as an additional contract worth $2.7 billion had yet to be signed.

"CERC China is only handling the above-rail development in the Iran project, and not the below-rail development. However, in the Jakarta-Bandung high-speed rail link, CERC is responsible for both above-rail and below-rail development," the embassy stated in a press release. (ags)(+)

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