TEAM ASSESSING HIGH-SPEED RAILWAY FEASIBILITY STUDIES PREPARED BY CHINA, JAPAN by Fardah

     Jakarta, Aug 12, 2015 (Antara) - A team of consultants set up by the Indonesian government to look into  the feasibility studies for the High-Speed Railway (HSR) project prepared by two bidders - Japan and China, are currently  reviewing the reports.

       The government will announce in two weeks the winner of the contract between China and Japan for the country's 150km-long high-speed link between Jakarta and Bandung.

       The contract is for the construction of tracks and high-speed train on the similar lines as the Shinkansen train network, the then Minister for the National Development Planning Andrinof Chaniago  stated after a meeting with a Chinese delegation of 11 senior officials led by Minister for National Development and Reform Commission Xu Shaoshi in Jakarta on August 11, 2015.

        "We will take into consideration all aspects including inputs from outside," Chaniago  said.

         Among the aspects to be considered in naming the winner of the contract include the commercial value of the project, the track record of the prospective partner (contractors), the contribution of the government in the project, commitment in employing local workers, and the use of local raw materials.

          Based on the Chinese feasibility study, the project, which includes the construction of tracks and express train, would cost around US$5.5 billion, or Rp74 trillion .

        Andrinof said China pledged to start the work in  September 2015, and construction will take three years  or to be completed in 2018.

         He said China does not ask for contribution in investment by the Indonesian government through state budget and guarantee for the investment.

         "China offers an annual interest rate of two percent for 40-year loan with a grace period of 10 years," Chaniago, who was removed from the cabinet by the president on August 12, said.

         The result of the feasibility study conducted by China was already handed over by Minister Xu Shaoshi to President Joko Widodo on August 10. 2015. 
    After the meeting with the president, the Chinese minister told the press that during the past eight months, the Chinese and Indonesian heads of state have held three meetings to enhance cooperation.

         "One of them is the Jakarta-Bandung fast train track project for which the agreement had been signed in March 2015," the Chinese minister stated.

         Xu Shaoshi noted that in April and June 2015, both had agreed on the framework, and the feasibility study results have been submitted to President Jokowi.

        He explained that the fast train line is about 150 kilometers long from Halim to Bandung and will also be connected to Gambir and the existing network.

        "Later, there will be eight stations along the track, and the train speed would reach around 300 kilometers per hour," the Chinese minister stated as he mentioned about offering a more competitive price with a better proposal.

         "We guarantee it can be completed in three years. The groundbreaking would be held in late August 2015, and the project would be completed in late 2018," he remarked.

        A joint venture of Indonesian-Chinese State-Owned Enterprises will be formed to manage the fast train project, in which Indonesia will hold 60 percent of the company's shares, and the rest will be held by China, according to the Chinese minister.

        "We want to seriously share with Indonesia to realize a fast train network in the country," he stated.

        In the meantime, the first phase of the Japanese feasibility study was handed over to the government in April 2015. 
   Japanese investors are planning to conduct their feasibility study in three phases at a total cost of US$15 billion.

         According to the National Development Planning Board (Bappenas), based on the Japanese feasibility study the project would cost Rp60 trillion.

         The Japanese asked for the government's contribution of 16 percent of the total investment  and the establishment of a special state company for high speed train.  
    Based on the study carried out by Japanese investors, this fast train project could shorten the time taken to travel from Jakarta to Bandung to 34 minutes from the current duration of two to three hours.   
   During a cabinet meeting on the HSR project on July 13,  President Joko Widodo  urged that the railway construction start "next month".

        "The president wants the groundbreaking to take place in August," the then coordinating minister for economic affairs Sofyan Djalil, who was appointed the national development planning minister to succeed Chaniago on August 12, told the press following the meeting.   
  In the meantime, former transportation minister Hatta Rajasa has reminded that the construction of HSR must employ local workers except for technical tasks that require special expertise.

       "The workers must be Indonesians, unless there is no one specialized to do those tasks," Hatta remarked on August 12, 2015.

        Regardless of which foreign technology is used in the project, the raw materials for it must be domestically sourced, if possible 50:50, and there should be a transfer of technology, he emphasized.

       Furthermore, Industry Minister Saleh Husin has asked Transport Minister Ignatius Jonan to give priority for domestically built trains  in the program to develop railway  transport system in the country.

        "We always coordinate with the transport ministry that domestically built trains are given the priority  in railway transport  development.We have PT Industri Kereta Api (INKA)," Saleh Husin said recently.

         He said INKA has the capability to build locomotives and  coaches, that the transport ministry no longer needs to import trains  from Japan as it did in 2014.

         In addition the country already has the skills  and technology needed to develop  railway industry, he said. 
   "Without participation of the government, the country's railway industry would remain in the doldrums," he said. ***2***
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