High-speed rail among $97bn in key Indonesian projects

High-speed rail among $97bn in key Indonesian projects

Chinese to build Jakarta-Bandung link, Japanese invited to add extension to Surabaya

A railway steward waits for passengers to board before departing from Jakarta to Bandung. Indonesia has picked China to build the country's first fast-train rail line linking the two cities. (Reuters photo)
A railway steward waits for passengers to board before departing from Jakarta to Bandung. Indonesia has picked China to build the country's first fast-train rail line linking the two cities. (Reuters photo)

JAKARTA: Indonesia plans to extend a high-speed rail project being built with China and bring in Japanese investors, as part of 89 priority projects over four years, a minister said on Friday.

The extension of the $6-billion Jakarta-Bandung rail project is among 1,422 trillion rupiah ($97 billion) worth of national strategic projects for the 2020-24 period, Chief Economic Affairs Minister Airlangga Hartarto said.

Such projects usually receive government support such as land-clearing assistance and tax incentives.

The rail project, part of Beijing's Belt and Road Initiative being built by a consortium of Chinese and Indonesian state companies, is facing a one-year delay due to the coronavirus pandemic, Hartarto said.

To ensure it is economically viable, President Joko Widodo has ordered the track be extended to Surabaya, a city about 760 kilometres east of Jakarta, and for Japanese investors to be brought in, the minister said.

China unexpectedly won the Jakarta-Bandung contract in 2015 despite stiff competition from Japan and Indonesian authorities had previously discussed with Japanese authorities a separate Jakarta-Surabaya rail project.

Other projects on the list include the state energy company Pertamina's plan to upgrade its Balongan refinery and transform it into a $12 billion petrochemical complex, Hartarto said, adding it would partner with an unnamed Taiwanese company.

Pertamina in late 2018 signed a framework agreement with Taiwan's CPC Corporation for a joint petrochemical business at an unspecified location worth $6.5 billion.

Major nickel processing projects in the towns of Morowali and Konawe on Sulawesi island and Weda Bay on Halmahera island were also in the priority list, Hartarto said.

The government would also prioritise construction of an industrial estate in Brebes on the island of Java to target companies that are relocating out of China, he said.


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