JAKARTA (TheInsiderStories) - Indonesian state firms wants to reduce their portion in the Jakarta-Bandung High-Speed Railway (HSR) project caused the cost swell. The consortium lead by PT Wijaya Karya Tbk (IDX: WIKA) are reportedly in negotiations with Beijing on the planned.
Currently, the consortium led by the company has 60 percent in the project, of which the the builder’ portion is 60 percent and Chinese is 40 percent. According to the CEO, Agung Budi Waskito in one seminar last week, the latest move comes as project costs are expected to increase by 20 percent to US$6.07 billion from the initial costs.
The 142.3 kilometers-long HSR project connects Jakarta with the textile hub of Bandung in West Java. The project was originally estimated to cost $5.98 billion when it was awarded to PT Kereta Cepat Indonesia Cina (KCIC), a joint venture between Chinese and Indonesian state-owned companies in 2015.
For the project, China Railway Construction formed a consortium with China Rail Way Group Ltd., Sinohydro Corporation Ltd., CRCC Wingdao Sifang Co. Ltd., China Railway Signal & Communication Corp., and The Third Railway Survey Design Institute Group Corp. While, other Indonesian companies in the consortium include railway operator PT Kereta Api Indonesia, toll road operator PT Jasa Marga Tbk (IDX: JSMR), and plantation company, PT Perkebunan Nusantara VIII.
Senior economic minister, Luhut Binsar Panjaitan, admitted that there are still some hurdles in the development of the project, including the demand from the China Development Bank for more guarantee in the form of setting up debt service reserve account. However, the construction work is expected to take place between the end of next year to early 2023.
In 2020, WIKA posted a net profit of Rp322.34 billion ($22.08 million) and sales of Rp16.54 trillion. The largest contribution came from the infrastructure and building sectors, followed by the industrial, energy, industrial plant and property sectors. In 2021, said Waskito, the constructor targeting to obtain a new contract of Rp40.12 trillion with order book of Rp115.02 trillion.
Previously, the Jakarta – Bandung HSR was suspended due to various problems. Now, the project is back on its way to construct with the penetration of an 11 tunnels structure that stretches over 1.8 kilometers, crossing under the Jakarta – Cikampek Toll Road from Halim in East Jakarta.
CEO of KCIC, Chandra Dwiputra, has said there will be two fast train tunnels that will be penetrated in the projects. In line with this, in the construction of the elevated structure, 1,741 piers have stood along the Jakarta – Bandung route and are ready to be connected. In addition, more than 12,000 high-speed rail tracks with a length of 50 meters each, are also gradually entering the shipping process from China.
Recently, telated to the National Strategic Project, President Joko Widodo decided to integrated the construction of the Jakarta - Bandung HSR with Jakarta – Surabaya express Train Lines. According to the minister of transportation, Budi Karya Sumadi, the Japanese investors will involves in the projects that estimating need costs Rp63.6 trillion.
Citing the Presidential Regulation Number 18 Year 2020 concerning the National Medium-Term Development Plan for 2020 – 2024, part of the funds to build the fast train are planned to be fulfilled through the State Budget worth of Rp21.6 trillion and private Rp42 trillion.
Based on the paper, the Jakarta – Bandung HST will cut travel time from three hours to 40 minutes. And the Jakarta – Semarang route cut the time from five hours to 3.5 hours. He said, the construction of Jakarta – Semarang is targeting begins in 2023 and to be completed by the end of 2024. This train has a track length of 435 kilometers.
Since 2015, the government has do its best effort to build fast train in the country. But, do to missed-management and calculation the project retreat until now. In 2016, China and Indonesia has established a joint venture to build and operate the Jakarta-Bandung HSR project.
The groundbreaking was held in January 2016. However, the construction was postponed due to issues ranging from funding to land acquisition. The lines is now designed to reach Kertajati Airport in West Java. The trains will have a maximum design speed of 350 kilometers per hour on the four-stop rail line.
US$1: Rp14,600
Written by Editorial Staff, Email: theinsiderstories@gmail.com
