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Indonesian Railways
Indonesia has delayed the launch of its high-speed rail trial until next month. This acts as a setback for them, the firm said on 8 August. This project is part of the Belt and Road Initiative and was set to be completed by 2019 but has seen significant delays.
This a super mega project connecting Jakarta to Bandung, it is a fine example of how geopolitics can determine so many things in any part of the world. Japan has tried its best to export Shinkansen to Indonesia, Indonesia does have similar geographical demographics to Japan.
Moreover, Japan had funded to study the connectivity channel between Surabaya and Jakarta which is a 730 km long track.
According to various news agencies, the plan will estimate an over addition of $1.2 billion due to overrun and delays. PT Kereta Cepat Indonesia and China (KCIC), the firm of Indonesia and Chinese state companies, are behind the 142 kilometres of track connecting Bandung and Jakarta.
The firm sought $1.03 billion from China Development Bank (CDB) last November, it was established as a consortium of four Indonesian companies and China International Railways, where Indonesia has a stronghold of 60 per cent while the other is 40.
Indonesia in Dilemma
The China Railways Group Limited posted a revenue of massive 171 billion dollars in 2022, Moreover, they are a major player in Laos China’s high-speed trains. KAI the state-owned operator has a mooring stake in the PT Pilar Sinergi BUMN of around 51 per cent, the firm has fueled additional capital to move this project.
CDB will be getting $4.55 billion which is to be repaid in the span of the next 40 years. Once the train will be operational the travel timings will be reduced to mere 4o minutes as compared to the present 3 hours. The first phase of the project is about 142 km. The approximate speed allowance will be from 200 kmph to 350 kmph and footfalls are expected to be more than 45,000 per day.
Although Indonesia has proposed to move its capital from Jakarta to the rainforests of Borneo Island which are around 1000 km away from the current. Construction of the new parliament started in mid-2022. Jakarta is highly congested and the warning of the submerge sequence has forced it to switch to a new place. According to the president, it should be called the city of ‘Nusantara’.
The Island of Borneo is the third largest Island in the world and is home to one of the rarest Fauna and Flora. Forest Watch Indonesia in its report has warned that most of the forests in the new capital area are the production forest, therefore leading to more deforestation in the area.
China v/s Japan
The best thing one can derive about China is its ability to give new solutions and be consistent with its partners, it has proposed new different infrastructural projects with Indonesia three times in 2015. In the end, it was China’s flexibility which won. The deal is an approach of business to business directly despite any bureaucracy of the government. A total of 600 hectares of land was to be under surveillance and for acquisition. China’s CDB decided to proceed only after the land claims went with them.
Japan was very eager to transfer technology of high-speed railway but Joko Widodo was rather more interested to improve its declining economy using connecting logistics of small and industrial areas as well.
In March 2015 the President visited Japan and with Shinzo Abe secured a fair deal of $1.2 billion in loans for railway projects. In Beijing, he met the officials and secured even more infrastructural deals and to Japan’s surprise, the money invited by China went up to $68.4 billion and even Jakarta-Bandung was also approved in that only.
