JAKARTA (TheInsiderStories) – The elite Jakarta-Bandung high-speed train project looks to be switching to a slower track. The target to commence operation by 2020 now looks highly unlikely; instead, the government now hints that commercial operation might start in 2024.
The key reason for the delay is not at all surprising: the government blames slow progress in the land clearance process, incomplete talks related to the financing scheme as well as extension of the line, which is now designed to reach Kertajati, the new Bandung Airport.
So far, land clearing has only reached 54 kilometers out of total length of 142. The government targets securing all land by April 2018.
Coordinating Minister for Maritime Affairs Luhut Binsar Panjaitan has revealed that his office is assessing progress of the Jakarta-Bandung fast train project as requested by President Joko Widodo. The assessment covers permits, frequency of the trip, land clearing, cash-flow model as well as an option to extend the railway track to Jogyakarta and Solo.
“This is still being discussed internally. We see its feasibility and it (commercial operation) will not happen in 2020, but 2024 or perhaps longer than that,” Minister Panjaitan said.
Director General for Railways at the Transportation Ministry Zulfikri told reporters on Tuesday (13/02) that the delay on the project was a result of a coordinating meeting attended by a number of cabinet ministers. Transportation Minister Budi Karya Sumadi said he is yet to receive confirmation as to whether project completion will be delayed; however, it is possible.
The Transportation Minister said disbursement of the loan to fund the project is contingent on the completion of land clearing.
The Jakarta-Bandung high speed train is being developed by PT Kereta Cepat Indonesia China (KCIC), a consortium of Indonesian and Chinese companies, and is estimated to cost around US$5.9 billion. About US$4.5 billion of these funds are anticipated from a China Development Bank (CDB) loan. This would cover 75 per cent of the total, with the remaining 25 per cent to be financed by the consortium as project equity.
On Apr. 4 2017, project developer KCIC signed an engineering, procurement and construction (EPC) contract with the High-Speed Railway Contractor Consortium (HRCC) in Jakarta. The signing of the EPC follows groundbreaking on the project by President Joko Widodo in January 2016.
The high-speed train project is a landmark joint effort between Indonesia and China and is also seen as a revolution in the country’s land transportation systems. The project was signed off by the President Director of PT KCIC Hanggoro with the President Director of CDB Hu Huaibang and witnessed by Indonesian President Joko Widodo and China’s President Xi Jinping.
Meanwhile, President Commissioner of PT Kereta Cepat Indonesia China (KCIC) Sahala Lumban Gaol said that the disbursement of the loan would take place once all the requirements are met. One of the prerequisites is the level of land clearing.
Strategic Project Evaluation
In addition to the Jakarta-Bandung high-speed train, the government is also currently evaluating the progress of 23 national strategic projects in the transportation sector.
Director General for Railways at the Transportation Ministry Zulfikri said that of these 23 projects, 13 are scheduled to begin operating this year.
Meanwhile, Coordinating Minister for Economic Affairs Darmin Nasution warned that the government may consider scrapping certain national strategic projects if they show no progress by 2019.