Indonesia has cancelled plans for a high-speed railway system connecting Jakarta and Bandung. (GA Photo/Tabita Diela)

China Railway to Jakarta: Choo-Choose Us

BY :TABITA DIELA

AUGUST 13, 2015

Jakarta. China Railway will hold a week-long exhibition in one of Jakarta's most upscale shopping malls to gain local favor as the company competes against Japan to win the first high-speed rail project in the archipelago nation, from Jakarta to Bandung.

The exhibition, hosted in Senayan City, showcases miniature models of China Railway's — China's state-owned rail company — bullet and freight trains and provides visitors with fact sheets and a customer service team will be on site to answer questions.

"The Chinese plan is extremely competitive and we are confident that we are Indonesia's best partner in this regard," said Xie Feng, China's ambassador to Indonesia, in his opening remarks at the exhibition opening on Thursday.

According to the ambassador, China has submitted a feasibility study for the project to President Joko Widodo and the railway operator is eager to begin construction should they win the tender.

The railway firm is upbeat that Indonesia will pick China as it believes it offers a win-win solution for both countries.

"It meets Indonesia's needs and requires no government budget or sovereign guarantee, thus imposing no fiscal pressure for Indonesia," the ambassador said.

According to a statement by China Railway chief engineer He Huawu the project would need $5.5 billion investment to cover the land, infrastructure development and train manufacturing costs.

China will provide lending assistance with a 2-percent interest rate annually and a 40-years tenor.

China has put on the table a joint venture scheme between China's consortium and an Indonesian consortium, in which Indonesia would hold a 60-percent stake and China the remaining 40 percent.

The Indonesian consortium would consist of eight Indonesian state firms — Wijaya Karya, PP and Adhi Karya; state railway signaling company Len Industri, state toll road operator Jasa Marga, state-owned plantation company Perkebunan Nusantara, state train manufacturer Industri Kereta Api or Inka and state train operator Kereta Api Indonesia.

"We are in the same boat. We will either sail together or sink and drown together," said Ambassador Xie.

Tender rival Japan is offering a similar project, which would cost around $3.3 billion with a soft loan to cover 75 percent of the funding with a 0.1-percent interest rate annually and a maturity of 40 years.

Ambassador Xie said that Chinese technology is compatible with that of other major players in the sector like Alstom, Siemens and Bombardier.

"In the future, Indonesia could be free to look beyond China and choose other equipment, technology and service products ... some country's technology is not compatible with international standards, which may lead to a market monopoly," said the ambassador.

The Indonesian government is scheduled to name the winner for the project at the end of August.

GlobeAsia

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