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Govt to pour Rp 4.3T into Jakarta-Bandung railway project
The Finance Ministry will inject Rp 4.3 trillion ($300.1 million) into the Jakarta-Bandung high-speed railway, so that construction can continue on a project that has far outgrown its original budget.
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Workers arrange equipment in front of an under-construction tunnel for the high-speed railway connecting Jakarta and Bandung in Padalarang, West Bandung regency, West Java, on Feb. 21, 2019. (JP/Wienda Parwitasari)
T
he Finance Ministry has announced a plan to inject Rp 4.3 trillion (US$300.1 million) from the state budget into the Jakarta-Bandung high-speed railway project, so that construction of the infrastructure can continue.
Finance Minister Sri Mulyani Indrawati told lawmakers on Monday that the funds were to cover capital that the consortium of four state-owned enterprises comprising the Indonesian side had failed to put up at the beginning of the project in 2015.
The largest equity commitment was from state-owned plantation company PTPN VIII with Rp 3.1 trillion, followed by state-owned toll road operator Jasa Marga with Rp 540 billion, state-owned railway company PT Kereta Api Indonesia (KAI) with Rp 440 billion and state-owned construction company Wijaya Karya with Rp 240 billion.
“At the time, these four SOEs were confident that they could provide the required base equity. In reality, they were unable to deposit it,” Sri Mulyani said during a hearing at the House of Representatives, adding that it was actually their responsibility, as the project was a business-to-business (B2B) scheme.
Read also: Jakarta-Bandung high-speed train gets bigger govt backing after cost overrun
Sri Mulyani said this base equity was vital for the China Development Bank (CDB), acting as lender to the project, to disburse the required loan to proceed with the construction.
The project has been at the mercy of the CDB, which at one point decided it could no longer provide the necessary funding because of the missing equity.
