Indonesia’s Belt and Road train off to an uneconomic start

Indonesia's Belt and Road train off to an uneconomic start

JAKARTA – Maritime Coordinating Minister Luhut Panjaitan made it clear right away that Southeast Asia’s first shot train doesn’t just be restricted to the recently opened 143-kilometer track that wound through the tea estates between Jakarta and the hills town of Bandung.

In a 2018 interview, he admitted that the short distance made no sense and had, by inference, turn into an elephant if the Chinese-funded fast-rail, then known as Whoosh, mandated that people endure up to an hour of intense customers in order to reach the embarkation points at each end.

Panjaitan and his team came to the conclusion that bullet trains needed to travel at least 300 kilometers in order to make sense commercially, not the quick Jakarta-Bandung climb, where the rough gradients and four stations ensure it will never reach the speeds that make fast-rail… well, fast.

After several ceremonies with visiting Chinese officials that never quite saw the sleek train get far beyond the station, Widodok finally launched the long-delayed PT Kerata Cepat Indonesia China ( KCIC ) project on October 2. This brought back the Bandung – Surabaya plan.

As it stands, the project’s initial US$ 6.07 billion cost finally ballooned to$ 7.27 billion, forcing the government to break its promises not to use the state resources to help close the cash gap. That has embarrassed and infuriated both institutions.

The 44.4 % add-on for engineering procurement, followed by 22.2 % for what property experts claim were completely predictable land acquisition issues that caused early delays in just getting the venture off the ground, are said to have been the main contributors to the inflated cost, according to media reports.

The$ 1.2 billion cost overrun will be covered by a new$ 560 million loan with the China Development Bank( CDB ), down from an earlier estimate of$ 1.4 billion, according to Deputy State Enterprise Minister Kartika Wirjoatmodjo.

According to the news website Katadata Indonesia, when cost overruns are taken into account, KCIC’s total bill for the CDB did reach$ 4.5 billion.

The planned Surabaya extension, which would have been elevated along its whole length, was not going to be possible during President Joko Widok’s two terms in office due to his accomplishments in the infrastructure.

Indonesia’s fresh bullet train, which was funded by China, is praised by” Infrastructure President” Joko Widodon. Facebook and Screengrab photo

Panjaitan told Asia Times in 2018 that the 750-kilometer project, which stretches from Bandung to West Java’s brand-new but sparsely used Kertajati International Airport, Purwokarta, Jogjakart, Solo, Madiun, and Surabaya East Java interface town,” is a 20 to 30 year purpose.”

He predicted that by then, Jakarta and Bandung, which are already the third-largest cities in the nation, would be one enormous city. ” We need to consider more than just five years.” The transportation must remain present and span hundreds of kilometers.

The new Jakarta-Bandung rail may struggle to draw users despite reducing journey time from three days to 40 minutes. Instead of fighting traffic to get to the train, some potential passengers are likely to proceed using the existing freeway and nbsp,- bhp., for a journey of two hours.

According to KCIC, the railroad is not anticipated to generate a profit for more than 40 years, which is twice the return on investment assumption made in the initial feasibility research. According to one report from last year, there are 31,215 passenger trips per day, which is roughly half of the company’s original projection.

Similar to the regular train service that easily departs from the major facilities in the middle and nbsp of both cities, solution rates range from$ 16 to$ 22. The menu will undoubtedly be higher during complete activity, yet with a continuous subsidy. & nbsp,

Transport experts worry that the Jakarta-Bandung fast-rail may never lose its novelty value, even with a light rail commuter service at the Bandung end & nbsp, of the line, due to the lack of competitive fare at this early stage.

Chinese President Xi Jinping expressed his annoyance at the protracted delays caused by land and technical issues that were impeding the Belt and Road Initiative( BRI ), a project worth$ 1 trillion, almost entirely.

Xi, who was well aware of the damage it was causing to China’s unheard-of global infrastructure development and nbsp, travel, tried to give the project new urgency during a meeting with Widoho in Beijing next year.

In a joint statement released by the two leaders, they stated that they were dedicated to finishing the new railway” as scheduled as one of their flagship projects” and to working on” more strategic projects ,” which they referred to as” nbsp ,” as well as other projects.

When Xi attended the G20 summit in Bali andnbsp last November, both institutions wanted the railroad available for testing, which allowed for an opening. However, it was not the great ceremony they had hoped for while the two frontrunners watched a test run.

An Economic Coordinating Ministry spokesperson confirmed the Chinese rejection of Jakarta’s request that the CDB meet 75 % of the funding gap using the same funding structure that applied to the original mortgage for the job on the high-speed line improvement to Surabaya.

Instead, it will distribute who receives what based on the current makeup of the shareholders, with China Railway International Corp. and four other Chinese companies holding the remaining 40 % and the KCIC pool being controlled by four Indian state-owned companies, respectively. & nbsp,

Disgruntled Indonesian commentators point out that the Chinese estimated the project’s cost at$ 5.1 billion in 2015 tender documents, which is less than the$ 6.2 billion & nbsp alternative bid from Japan to construct the line.

In the end, even though the patient Japanese had done much of the early feasibility work, it was that and the notion that the Chinese would complete the task more quickly that swung the project & nbsp, Beijing’s way.

Speed has been everything in Widodok’s Indonesia, & nbsp, which explains why he is determined to move the new national capital from Jakarta to East Kalimantan, the ultimate cap on his sizeable legacy of infrastructure-building.

When an authorized study by KCIC in 2016 found at least four details along the trail that were thought to be geographically fragile, critics claim that engineering difficulties should have also been anticipated. & nbsp,

The proposed Jakarta-Surabaya extension would raise the whole line, and a feasibility study reveals that it is susceptible to geological threats. KCIC photo

Public policy skeptics expressed their concerns about the job, some of them in letters sent directly to Widoho, & nbsp, with one vocal expert saying that such a little fast-rail wasn’t practical because it would take years to recover the cost.

In keeping with the late tech-savvy leader B J Habibie’s advice that Indonesia needed a cutting-edge mode of transportation. At last week’s launch & nbsp of the Jakarta-Bandung line, he said,” We must not be afraid to learn and try new things, even despite unexpected difficulties that may arise during the process.”

Its time will come, just not now, like the long-planned span across the Sunda Strait connecting Java and Sumatra. Coming governments will need to include it on the list of national strategic tasks, or else it will be beyond our economic features, one senior transportation official told Asia Times.