MRT Jakarta in Lebak Bulus station - Photo by PT MRT Jakarta

JAKARTA (TheInsiderStories)— Indonesia and Japan will sign a loan agreement of Rp25.6 trillion (US$1.80 billion) for financing the mass rapid transit (MRT) project phase II in the early July, President Director of PT MRT said in Jakarta after visiting the MRT project with Japanese Foreign Minister Taro Kono on Monday (25/06).

The company is currently completing the first phase of MRT project with operation date expected by March 2019.

“The two train already came last August, we will start checking the entire system,” he said as quoted by CNBC Indonesia.

The company is preparing an integrated testing and commissioning test using two series of trains that already available at Lebak Bulus station. Another three or four trains will arrive July and 16 trains will come in December.

The MRT tariff will be decided at the end of August as it includes the subsidy from the regional budget of DKI Jakarta. The latest survey in 2013, the ticket price was estimated to be around Rp20,000 (not yet subsidized by the Provincial Government of DKI Jakarta).

Before the visit to MRT project, Indonesia’s Foreign Affairs Minister Retno Marsudi dan Japan’s Foreign Affairs Minister Taro Kono held the 6th Strategic Dialogue Indonesia-Japan meeting. In the meeting, both ministries agreed to accelerate Japan’s investment in infrastructure projects in Indonesia.

Japan compete with China for infrastructure projects in Indonesia, most notably in the fast train project that connects Jakarta and Bandung. China finally won the project.

Indonesia is late to build the MRT and other mass transportation projects compared to the other countries. The MRT project is expected to solve the traffic problem in Jakarta.

Indonesia had planned to build the MRT since 1980. At that time, more than 25 general and special studies have been conducted to build MRT system in Jakarta. However, the project was unrealized due to some problems including the economic and financial crisis of 1997.

The basic design of the project finally begun at the end of 2010 and the tender process took place at the end of 2012. The groundbreaking conducted in October 2013.

Japan is the second-biggest investor in Indonesia with a total investment of US$5 billion in 2017 and US$1.4 billion in the first quarter of 2018.

The value of trade between the two countries grew 13.54 per cent to US$33.03 billion in 2017 (year on year/yoy). Indonesia recorded US$655.9 million surplus in the trade with Japan in the first quarter of 2018. However, the surplus mostly contributed by oil and gas exports. Indonesia recorded deficit in non-oil and gas trade with Japan of US$250.9 million.