Construction of Indonesia's Jakarta-Bandung Railway Should Start Soon
After experiencing a two-month delay due to permitting and concession trouble, the construction of the Jakarta-Bandung fast train should be able to commence soon. Indonesian Transportation Minister Ignasius Jonan confirmed on Wednesday (16/03) that his ministry agreed to grant a 50-year concession period to the Chinese-Indonesian consortium named Kereta Cepat Indonesia Cina (KCIC). The granting of this concession means that KCIC should be able to secure the necessary construction and business permits soon. The USD $5.1 billion Jakarta-Bandung railway (in West Java) is one of the mega-infrastructure projects of Indonesia.
Despite the groundbreaking ceremony having been conducted in late January 2016 (witnessed by Indonesian President Joko Widodo), the kick-off of construction of Indonesia's first ever high-speed railway was postponed due to impending paperwork and revisions that had to be made to the project's development plan. Without concession agreement, railway infrastructure operational permit and construction permit the project could not commence as planned. Indeed one can argue that the groundbreaking ceremony was held too soon (just like the groundbreaking ceremony of the USD $4 billion Batang power plant in August 2015). However, these early groundbreaking ceremonies should be seen as signs that Widodo is fully committed to infrastructure development, eager to speed up the take-off of projects even though not all permits have been obtained or all land acquisition activities have been completed.
Transportation Minister Jonan said his ministry granted concessions for the fast train railway to KCIC for a period of 50 years, starting from 31 May 2019 (when the railway is scheduled to become operational). After this 50-year period has ended operation of the railway will be transferred to the Indonesian government.
Originally total costs for the mega-project were estimated at USD $5.5 billion. However, costs were revised down to USD $5.1 billion because the route has been shortened to 142.3 kilometers (from 152.3 km previously) and the train will not pass through Gambir station in Central Jakarta but through Halim in East Jakarta.
The joint venture tasked to construct the Jakarta-Bandung railway is Kereta Cepat Indonesia China (KCIC), which consists of Pilar Sinergi BUMN Indonesia (owning a 60 percent stake in KCIC) and China Railway International Co Ltd (owning 40 percent). The latter is China's largest rail operator. The Pilar Sinergi BUMN Indonesia consortium consists of four Indonesian state-owned companies: Wijaya Karya, Kereta Api Indonesia, Jasa Marga, and Perkebunan Nusantara VIII.
The bulk of the project will be financed through a loan from the China Development Bank. The Indonesian government repeatedly emphasized that no state funds will be used to finance the project. The break-even point for this USD $5.1 billion project is expected to be reached in some 40 years time.
The Jakarta-Bandung railway is expected to boost employment. For the three-year construction phase an estimated 39,000 workers are needed, while an additional 48,000 workers are needed in the next 15 years for the construction of various property and infrastructure projects related to the Jakarta-Bandung railway as new economic centers and cities are expected to rise along the 142 km long route.
| Jakarta-Bandung Fast Train: | |
| Elevated | 73.0 km (51.3%) |
| Ground | 52.6 km (37.0%) |
| Tunnel | 16.8 km (11.7%) |
| Speed | 250 km/hour |
| Ticket Price | ± USD $16 |
Source: Bisnis Indonesia