JAKARTA (TheInsiderStories) – PT Kereta Cepat Indonesia China (KCIC), a consortium of Indonesian and Chinese companies building Indonesia’s first high-speed railway has signed a US$4.5 billion loan with China Development Bank (CDB). The loan will cover 75 percent of the total costs, which are expected to reach $6 billion.
The deal signed by the President Director of PT KCIC Hanggoro with the President Director of CDB Hu Huaibang witnessed by Indonesian President Joko Widodo and China’s President Xi Jinping, according to a statement issued by Widodo’s office as part of a working document that is the implementation of Indonesia-China comprehensive strategic partnership in 2017-2021.
In Apr 4 2017, the project developer KCIC signed an engineering, procurement and construction (EPC) with the High Speed Railway Contractor Consortium (HRCC) in Jakarta. The signing of the EPC follows the groundbreaking of the project by President Joko Widodo in January 2016.
The high-speed train project is a landmark joint project between Indonesia and China and is seen also a revolutionary in the country’s land transportation mode system. Minister for State Owned Enterprise Rini Soemarno hpes that the project can run smoothly and completed in time.
Hanggoro said over the past one year or so, the consortium developer has finalized the required permits and supporting documents to execute the project, including environmental impact assessment, called AMDAL. The project design has also been done.
“We are really careful in discussing the technical aspects and pricing of the project as this is the first such (HST) project in Indonesia. This is a historic moment for Indonesia and showing a good start, right time, right quality in line the expectation of the President and the people of Indonesia.
Chairman of KCIC Sahala Lumbangaol said the contractor has shown its commitment and hopefully the project can be carried out by maintaining high quality standard, on-time and smoothly. “We request the support of China Development Bank (CDB) so that the project can be completed this project in time,” he said.
Hanggoro said once the EPC contract is signed, the next step is attaining the financial close. The developer of the project KCIC will begin discussing the financing facility of the project with CDB this week, while CDB representatives are still in Indonesia. “We hope to finish this (Financial Close) quickly. The value of the financing facility is being discussed,” he said.
The Jakarta-Bandung HST is projected to cost around US44.7 billion with total length of 142 kilometers. The project is expected to be 755 financed by CDB and the remaining 25% is financed by the consortium as project equity.
Hanggoro added he expects the construction will start soon in stages. In the first phase, KCIC will develop 20 km.
When asked whether the project will be completed in 2019 as scheduled, he said, “We will work all out. If necessary working in three shift and adding workers if needed,” he said.