Jakarta-Bandung Railway to Break Ground as China-Indonesia Ties 'Better Than Ever'

BY :BASTIAAN SCHERPEN

JANUARY 19, 2016

Jakarta. Construction of the Jakarta-Bandung high-speed railway project is set to start this week after mere months of hard work, Beijing's envoy in Jakarta said on Tuesday, signaling that the relationship between China and Indonesia is "better than any time in history."

Ambassador Xie Feng said a groundbreaking ceremony for the $5.5 billion project, almost entirely financed with China Development Bank loans, would be held at the Walini plantation area in West Bandung district on Thursday.

The ceremony will be attended by Chinese State Councilor Wang Yong, Xie said, adding that the speedy start of the "flagship project" proved that there "has been notable progress in streamlining administrative process and improving the investment environment" under the "strong leadership of President Joko Widodo."

Serious discussion of the planned railway between Chinese and Indonesian stakeholders only started in March last year, the ambassador told reporters in Jakarta.

The Kereta Api Cepat Indonesia China (KCIC) joint venture agreement between Chinese and Indonesian SOEs  was signed in October after a hard-fought tender process that ultimately left Japanese bidders empty-handed. 

Indonesian builder Wijaya Karya, toll road operator Jasa Marga, railway operator KAI and plantation company Perkebunan Nusantara VIII together hold a 60 percent stake in the joint venture, while China Railway International controls the remaining 40 percent.

Maritime Silk Road

Japan has in recent years been trying to strengthen its ties with Southeast Asian nations, but China is also vying for influence in the region.

Beijing has disputes with a number of countries over its territorial claims in the South China Sea, but natural resource-rich Indonesia, Southeast Asia's largest economy, has steered clear of getting directly involved in those conflicts.

In fact, Ambassador Xie said the Jakarta-Bandung high-speed railway project reflects the strong commitment on both the Indonesian and the Chinese side to cooperate more closely and, ultimately, to link Joko's Global Maritime Fulcrum doctrine to President Xi Jinping's Maritime Silk Road initiative.

While still outperforming most other major economies, growth in China has been slowing, leading Beijing to increasingly look abroad for opportunities. The Maritime Silk Road and the Silk Road Economic Belt initiatives are key parts of this strategy.

Joko's Global Maritime Fulcrum doctrine, as presented at the 2014 East Asia Summit in Myanmar, outlines his views on how the archipelago's strategic position between the Indian and Pacific oceans can best serve Indonesia's development and security interests.

Xie said that Joko and Xi had met in person four times in the past year, signifying growing political trust between the two presidents.

"One theme that runs all the way through is to find ways to promote the 21st Century Maritime Silk Road Initiative and the Global Maritime Fulcrum in a synchronized manner and to deepen and expand our practical cooperation in various fields," the ambassador added.

Joko's first trip abroad as president of Indonesia was to Beijing in early November 2014, to attend the Asia-Pacific Economic Cooperation (APEC) summit. Upon his return, he said there was much that Indonesia could learn from China's "quantum leap" in infrastructure development.

President Joko Widodo, left, and President Xi Jinping. (Reuters Photo/Kim Kyung-hoon)

'No difficulty shall stand in our way'

The Indonesian Transportation Ministry last week issued a track permit, allowing construction of the 142-kilometer line between the national capital and that of West Java province to begin.

The rail connection, which according to Indonesian officials will allow travel at a maximum speed of 250 kilometers per hour, will run from East Jakarta to Tegalluar on Bandung's southeastern outskirts.

The Chinese ambassador cited a Bandung Institute of Technology (ITB) study that estimated average daily passenger numbers on the line to reach 44,000 when the ticket price is set at Rp 200,000 ($14,50).

More importantly, the project will boost the Indonesian economy as a whole, the ambassador said, just like high-speed railways have contributed to China's prosperity since 2003.

"The project will drive the development of supporting industries such as smelting, manufacturing, infrastructure, power generation, electronics, services, logistics and real estate," Xie said.

"So long as the two sides can accommodate each other, learn from each other and share the risks and benefits together, no difficulty shall stand in our way."

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