Jakarta —
A year after the opening of Indonesia’s first high-speed railway, Hushu, linking Jakarta and Bandung, Indonesia is asking China to invest in an eastward extension to Surabaya, a port city in East Java.
The rail service is one of former President Joko Widodo’s flagship infrastructure projects and is part of China’s Belt and Road Initiative. The Fouche attracted more than 4 million passengers in its first year, and the government added more trips.
Currently, the government is conducting a feasibility study to extend the Jakarta-Bandung line to Surabaya in hopes of increasing the use of rail services. The extension will reduce travel time from Jakarta to the port city from eight hours to just four hours.
Dhanan Parikesit, a transport policy professor at Gadjah Mada University, said the extension to Surabaya would have a positive economic impact, especially for cities with high-speed rail stations. “This will further promote Java’s economic integration and sustain Indonesia’s growth momentum in the services and trade sector.”
Indonesia pitched three major railway projects at the Shanghai Railway Expo in June. The project includes a high-speed rail Fouchu and Bandung urban rail system, a future airport line in the capital Nusantara, and an urban rail interconnection linking Nusantara with neighboring cities.
Rizal Wasal, director of the Ministry of Transport and Railways, said these projects are part of the ministry’s strategic plan from 2024 to 2029.
According to the ministry, Bandung Railway’s return on investment is expected to be 11.9%, and the government will support it with a Viability Gap Fund that will cover 49% of the cost.
“With such potential, we encourage them to participate in the Bandung Urban Rail Project through a public-private partnership (PPP) scheme with a concession period of up to 30 years,” Rizal said in a statement to potential private investors. ” he said.
Mr. Danang added, “Our country’s transportation infrastructure has been stagnant for many years, reducing our competitiveness in domestic and international goods and services.
“Indonesia’s long-term development plan will cut logistics costs in half. Investments and improvements in infrastructure such as highways, rail systems, ports and airports, as well as gas pipes and floating storage facilities will therefore require We need international partners.”
Chinese investments in Bali and Nusantara
In August, the China-funded autonomous rail rapid transit system (ART) was unveiled at Indonesia’s 79th Independence Day celebrations in Nusantara.
Other growing cities, such as Bali, are also seeking to build China’s first light rail transit (LRT) system. The state-owned China Railway Construction Corporation (CRRC), which is involved in the construction of the Jakarta-Bandung high-speed railway, will participate in the construction of Bali’s LRT system.
But Danang warned that over-reliance on Chinese investment is not sustainable.
“Diversifying and expanding our partnerships with other countries will provide a better foundation for our country’s future transport development. We therefore recognize the urgent need for transport investment and the I believe we need to strike a balance between taking the best we can and diversifying our partnerships.”
China overtakes Japan in Indonesia’s railway sector
Some experts say China is not only making progress in building new railways, but also playing a role in replacing aging rolling stock on the Jakarta urban commuter line.
A study conducted by Malang University found that Japan has supported railway modernization projects in Indonesia’s Jakarta, Bogor, Depok, Tangerang and Bekasi (Jabodetabek) regions through official development assistance loans.
However, Fadlan Muzakki, a researcher at the ASEAN-China Research Center at the University of Indonesia, said China has now surpassed Japan in developing its railway sector.
“Indonesia chose China because China offered to transfer technological knowledge to Indonesia without any conditions or complex requirements, and because they lobbied persistently,” he said. .
Fadlan’s research shows that Japan is willing to fully transfer its knowledge of railway technology if Indonesia pays 25% to 30% of its debt. This means Indonesia would have had to wait at least five to 10 years for the technology transfer to be fully completed.
As a result, in February, PT Kereta Commuter Indonesia, a subsidiary of PT Kereta Api Indonesia, signed an agreement with China’s CRRC to purchase three completed trains for $49.15 billion. Five months later, we decided to procure eight more trains.
Fadlan warned that Indonesia should not become overly dependent on Chinese investments in the transport sector. He suggested that Indonesia diversify investment sources, enable public financing, and introduce strong risk assessment and negotiation strategies when dealing with Chinese investors.
According to Mark Green, director of the Wilson Center, 10 years after the Belt and Road Initiative was launched, 80% of Chinese government loans to developing countries have gone to countries in debt crisis, leading to increased inflation, currency depreciation, and rising poverty. It is said to be exacerbating the country’s economic problems. level.
Transport analyst Joko Setijowarno said that rather than simply importing trains from China, Indonesia will further develop its national train manufacturing company PT Industri Kereta Api (INKA) to meet Indonesia’s growing train demand. I agreed that it should be done. INKA has exported trains worth $72.39 million to Bangladesh and more than $26 million to the Philippines.
Danang pointed out that Indonesia has a development plan for the next 20 years, aiming to become a high-income country in 2045. He said increased transport investment will increase the country’s competitiveness in global markets and reduce economic disparities between regions and societies. Classes will help you achieve this goal.
