Indonesia’s high-speed rail to start construction early 2018
Work on the US$5.1 billion project awarded to Chinese developers two years ago was supposed to have begun last year, but has been held up by land issues
Indonesia aims to kick off construction of its much-anticipated high-speed-rail project linking the capital Jakarta to Bandung, the country’s second-largest metropolitan area, early next year, Trade Minister Enggartiasto Lukita said recently.
Work on the US$5.1 billion project awarded to Chinese developers two years ago was supposed to have begun last year, so as to meet the ambitious completion date set for 2019. Though the groundbreaking ceremony was conducted in January 2016, hindered by land issues, the actual implementation of the project has dragged on, like many other infrastructure projects in the country.
“The problem is solved already, I believe,” Lukita told Asia Times on October 13 during Trade Expo Indonesia 2017. “The construction will start early next year,” he added, meaning the acquisition of land along the project is drawing to a close.
The minister also pointed out that “it is not the land issue only, but also the financing problem from China”. Previously, the China Development Bank, which had pledged to provide 75% of the total cost, refused to dispense the funds. Instead, it offered a $4.5 billion loan until the many land-ownership problems standing in the way were resolved.
Meanwhile, more railway projects are set to launch, including a route connecting Medan, a city in North Sumatra, to Aceh, a province on the northwestern tip of the island.
Meanwhile for railway projects in Kalimantan, the Indonesian part of Borneo, not only Russia but also China have shown interest. “We have proposed our plan to companies from those countries,” Lukita said.
Japan, China, South Korea as well as local companies will continue to play primary roles in the country’s infrastructure construction, Lukita said. The government has prioritized infrastructure development, and “once they are built, it will be easier to invite other kinds of investment”.
Indonesia, Southeast Asia’s biggest economy, is trying to lure investors for a $450 billion infrastructure drive to boost its economy.