Indonesia Says It Must Prioritise Safety of Delayed China-Funded Bullet Train

JAKARTA (Reuters) – Indonesia is prioritising security forward of the deliberate business launch of its China-funded $7.3 billion high-speed railway, its transport minister stated on Friday – addressing considerations a few venture already years delayed.

A flagship venture of President Joko Widodo and a part of China’s Belt and Street Initiative, the 142-kilometre (88-mile) railway connecting Jakarta to the town of Bandung was initially set to be accomplished by 2019.

However it has been beset by issues, together with delays as a result of land procurement points, the COVID-19 pandemic and a $1.2 billion price overrun.

The consortium of Indonesian and Chinese language state corporations constructing the railway, PT KCIC, earlier this week postponed a deliberate free trial run by about two weeks to Sept. 1 to make sure security.

It continues to intention for a business launch on Oct. 1, however Transport Minister Budi Karya Sumadi advised Reuters in an interview that these dates will not be set in stone.

“The president advised me to not rush it. He is aware of that the primary precedence is security…that is the primary (high-speed practice) in Indonesia and ASEAN, and it has a sophisticated know-how so we’ve got to watch out,” Budi stated, referring to the Affiliation of South East Asian Nations.

His ministry is at the moment doing security exams, the minister stated, whereas underscoring the complexity of the venture.

Final month, Chinese language President Xi Jinping advised President Widodo throughout the Indonesian chief’s journey to China that each nations should make sure the venture adheres to excessive requirements because it nears completion.

“Any delay will imply delayed earnings (for venture operator) and there can be penalties to monetary ratios. However we as technical folks suppose security is paramount, and the president has thought of all penalties,” Budi stated.

KCIC is already struggling to cope with the venture’s price overrun, particularly as one of many consortium members, Indonesia’s building agency PT Wijaya Karya, is dealing with its personal debt troubles.

Negotiations for an extra $560 million mortgage from the Chinese language Growth Financial institution are underway to finish the remaining building.

Given the rising price, there have been considerations that ticket costs must be set excessive to make sure funding returns.

Budi stated the practice fare could be set at 250,000-300,000 rupiah ($16.44-$19.72) – under the 350,000 rupiah estimate with out authorities intervention – with the chief of the consortium, Indonesian railway agency PT Kereta Api Indonesia, anticipated to subsidise costs.

Nonetheless, that might be twice the value travellers now pay for a visit between the 2 cities aboard a daily practice.

“We hope with the subsidy, the economical value can be close to the value that the passengers are prepared to pay,” Budi stated.

($1 = 15,210.0000 rupiah)

(Reporting by Stefanno Sulaiman; Modifying by Gayatri Suroyo and Hugh Lawson)

Copyright 2023 Thomson Reuters.