Indonesia considers China funding for Japan-backed Jakarta-Surabaya high-speed rail: Report

Indonesia considers China funding for Japan-backed Jakarta-Surabaya high-speed rail: Report

Indonesia railways

JAKARTA: Indonesia is now looking at China, to fund a Japan-backed high-speed railway after higher costs threatened to undermine the project's feasibility, according to Indonesia's Coordinating Maritime Affairs Minister Luhut Pandjaitan, reported the Jakarta Post on Wednesday (Jul 6). 

The statement comes months after both President Joko Widodo and Japanese Prime Minister Shinzo Abe discussed how to get the project, worth Rp 102 trillion (US$7.66 billion), started.

Luhut said the existing track did not have the infrastructure needed to support newer and faster trains, according to the Jakarta Post. Upgrading the existing tracks would result in a surge in costs, he added.

"With more than 100 turns [in the track], the cost can go up. But we also need to explore whether we need to build a new track."

The cost of the new elevated tracks could increase five-fold from the original cost of Rp 102 trillion.

Despite the large costs, the new track may also struggle to compete as Surabaya's transport infrastructure improves with toll roads and air transportation. 

Indo high speed rail 1
Indonesian President Joko Widodo (L) views a model of his country's first high-speed train. (Photo: Indonesian President's Office)

When asked if Japan would still be guaranteed the project despite the higher cost, Luhut said that he would consider the country with the cheapest funding.

"If we can secure cheaper funding, then the burden for the state would be minimal," he said.

China has also expressed interest in the project and according to Luhut, both China and Japan are being considered, the report said.

Indonesia is also seeking financial support for the project from the private sector, according to the Post.

“We will see if it will be [financed through] loans or B2B [business to business],” said Transportation Minister Budi Karya Sumadi.

He added that construction is expected to begin in 2020, the report said.

Meanwhile, the deputy chief of mission at the Japanese Embassy in Jakarta, Kozo Honsei, said that he "did not know 'to what extent Luhut referred to the new track'" as Japan's initial proposal was only to upgrade the existing Jakarta-Surabaya railway.  

However, Honsei maintained that both Jokowi and Abe were "committed to the project".

Source: CNA/aa