High-speed rail in Indonesia

Indonesia's first – and historic Southeast Asia's first – high-speed rail (HSR) project was expected to connect the country's largest city Jakarta with Bandung, the capital of West Java, covering a distance approaching 142.3 kilometres. Plans and studies have been in the works for high-speed rail (HSR) in Indonesia around for many years. However, it was not until 2008 that it was contemplated seriously. The new plan to finally start HSR construction was announced by Indonesian government in July 2015, after President of China and world leaders visited Bandung Conference.[1] Plans were also mentioned for a possible extension of the HSR to Surabaya in East Java.

Proposed high-speed railway in Java, Indonesia

Indonesia already has a conventional railway network.

History and development

Japan International Cooperation Agency's proposal initiated the idea to build high-speed rail for the Indonesian island of Java, linking up the capital Jakarta to Surabaya city (covering 730 km) in East Java.[2]

Both Japan and China had expressed their interest in the high speed rail projects in Indonesia. Previously, both countries had carried out comprehensive studies for a project for the Jakarta–Bandung section (142.3 km). Only the Japanese agency, JICA, had issued a study for a project extending to Surabaya (730 km).[1] The Indonesian HSR bid marked rivalry between Japan and China in their competition for Asian infrastructure projects.[3]

On late September 2015, Indonesia awarded the rail project to China,[4][5] much to Japan's disappointment.[6] It was said that China's offer to build the Jakarta–Bandung line without requiring an official loan guarantee nor funding from Indonesia was the tipping point of Jakarta's decision.[7][8]

In January 2016, Transportation Minister released a route permit[9] for a high speed railway between Jakarta and Bandung (142.3 kilometers) with stations located at Halim (Jakarta end), Karawang, Walini, and Tegalluar (Bandung end) and also Tegalluar depot.[10] 71.63 km of the track will be at ground level, 53.54 km will be elevated, and 15.63 km will be underground.[11] The better departure point at the Jakarta end would be the inner city railway station of Gambir but because construction of the Gambir-Halim leg was seen as adding complications, the link will only be from Halim (Jakarta) to Tegalluar (Bandung) with a cost of $5.135 million. Concession period is 50 years from May 31, 2019 and cannot be prolonged, except in a force majeure situation.[12] Groundbreaking has been done on January 21, 2016. The HSR is project of 60 percent of Indonesian consortium and 40 percent of China Railway International.[13] The Jakarta–Bandung high-speed rail is planned to begin its operations to public in 2019[14] The Japanese proposal can start operation only by 2023.[15] The section Bandung-Surabaya, though a priority section due to heavy congestion, has been officially shelved for budget reasons since early 2015.

In October 2016, the Indonesian government announced its intention to build a 600 km medium-high speed railway between Jakarta and Surabaya, and invited Japan to participate in this project.[16]

Japan's proposal
Shinkansen E5 series proposed by Japan

Since 2008, Japan has been long-nurtured the plan to export their Shinkansen high-speed railway technology to Indonesia. During Indonesia-Japan Friendship Festival in November 2008, Japan has showcased their Shinkansen technology to impress Indonesian audiences.[17] In 2009, a Japanese government-sponsored feasibility study was conducted for the planning of project – a high speed (300 km/hr) rail line extending 730 kilometers across the island of Java from Jakarta to Surabaya.[3] The idea of high-speed rail backed by funding (soft loans) has been proposed by Japan International Cooperation Agency (JICA) for the Indonesian island of Java, linking up the densely populated corridor from the capital Jakarta to Surabaya (730 km).[6][18] The island, similar in many respects to pre-HSR Honshu, suffers greatly from both freight and passenger congestion.[19]

The idea has been around for some years, however, a new proposal to divide the project into stages has emerged, with the first stage from Jakarta to Bandung, 150 km to 35 minutes, from current conventional train time of 3 hours at a price of 50 trillion rupiah. The JICA detailed feasibility study was finished in 2014, following up on an initial study in 2012. By 2013 Indonesia has been undergoing a revival in railway expansion and upgrades in recent years. High-speed corridors have been proposed but not implemented.

Japan – with its reputation as a world-class train-maker – seemed destined to win the contract. However, in 2014 Indonesian government changes, as Joko Widodo swore as a new president in October 2014. In January 2015 the Joko administration essentially stopped preparations for the high-speed rail project, citing that the high-speed rail project is too costly and there are more pressing infrastructure needs in outlying underdeveloped islands outside of Java.

Japanese domination in high-speed rail project seemed to be unchallenged. However, that was until April 2015 when China had entered the race with a counter-offer.[20]

In March 2015, Joko Widodo traveled to Tokyo and Beijing. In Tokyo March 22–25 Joko Widodo met Japanese Prime Minister Shinzo Abe, Widodo got a commitment for Japanese loan support for improving Jakarta's municipal rail network, but no progress was made on resolving issues with the Jakarta–Bandung high-speed rail project.[3]

China's bid
CR400AF proposed by China.

In April 2015, China submitted a bid for the Indonesian high-speed rail project – much to Japan's dismay.[7]

On March 26, 2015, Joko Widodo visited Beijing and met China's paramount leader Xi Jinping. Xi publicly announced support for the Indonesian high-speed project and the two governments signed a memorandum specifying China's interest in the Jakarta–Bandung line.[3]

In July 2015, Indonesian government exposed their plan to build the high-speed rail connecting Jakarta and Bandung, and arranged a contest between Japan and China train-makers as potential bidders.[1] China responded by launching a Chinese High-speed Rail Technology exhibition in Senayan City shopping mall in Jakarta in August 2015.[21]

Both China and Japan have engaged in a fierce competition through intense lobbying. It was said that the fundamental reason for the high level of assertiveness demonstrated by both Japan and China goes well beyond just economics – this contest is part of a much larger chess game the two Asian powerhouses are playing in pursuit of greater strategic influence within the Asia Pacific.[22][23]

Short cancellation

President Joko Widodo was expected to announce the winning bid of Indonesia's first high-speed rail project in early September 2015. However, to everyone's surprise, on 3 September 2015 the Indonesian government announced that they had cancelled the high-speed rail project, citing that they are now looking to the slower and cheaper rail alternative.[24] It was said that the government turns to semi-high-speed rail.[25]

President Joko Widodo is wishing for a "business-to-business" approach, as opposed to "government-to-government" approach.[3] Which signify government unwillingness to partially fund nor financially guarantee this costly project. After the cancellation, it seems that China secretly reapproaches Indonesia with a new offer, while Japan failed to do so.

Bid winner

In mid-September 2015, China said they would fully meet the Indonesian government's demands and offering new proposal that does not require Indonesia to assume any fiscal burden or debt guarantee in proceeding with the project.[26] After months of bids, revisions and talks among presidents and prime ministers – even a short-lived cancellation of the project – in late September 2015 Indonesia picked China for the $5 billion project.[15] It seems that Beijing has outmanoeuvred Tokyo on this bid as a result of a competitive financing package for Indonesia.[8]

Japan's Chief Cabinet Secretary Yoshihide Suga termed the Indonesian move "difficult to understand" and "extremely regrettable".[20] The situation "can only be described as extremely deplorable," Suga also said.[26] According to Indonesia's State-Owned Enterprises Minister Rini Soemarno, Chinese bid was picked due to its financial structure – because the Chinese had not required any Indonesian government financing or a government guarantee, unlike the Japanese plan.[27]

China's victory over Japan in this bid seems to owe mainly to Chinese willingness to accept the financial risk of the project. Which is to forego an Indonesian government guarantee and also, thereby, possibly to finesse international ODA norms, in contrast of Japan's inability or unwillingness to do so.[3]

China has also sweetened its deal in other ways, including committing to establish a joint venture with Indonesian firms to produce rolling stock for high-speed rail, electric rail, light rail systems, not only for Indonesia, but also for export to other Asian countries – to transfer related technology – and to renovate and rebuild train stations. It seems that Indonesia has benefitted from Japan-China competition.[3]

Controversy

In April 2016, five Chinese high-speed rail project workers were arrested in Halim Perdanakusuma Airbase.[28] This incident highlighted the refusal of Indonesian Air Force to give up lands belonging to the Halim Perdanakusuma airbase in East Jakarta. It was reported that one of the railway stations would be located on land currently within Halim airbase.[29]

In February 2018, Onan Hiroshi, a Japanese cartoonist described Indonesian President Joko Widodo as a "High-speed rail beggar"[30] in relation with the stagnant Chinese high-speed rail project in Indonesia, and accused Indonesia to have requested Japan's assistance in completing the project. The cartoon quickly drew protest from Indonesian internet users, and by 25 February, the cartoonist tweeted an apology, removed the drawings and closed the page.[31]

Jakarta–Bandung
Jakarta-Bandung high-speed rail
Jakarta Halim
Jakarta-Cikampek Toll Road
Special Capital Region of Jakarta
West Java
 Karawang
Karawang–Walini tunnels
 Walini
Walini–Tegalluar tunnels
Padaleunyi Toll Road
 Bandung Tegalluar
Tegalluar Depot │ Rancaekek

Stations

Initial 4 stations

Maintenance facility
  • Cawang Maintenance Depot
  • Gedebage Substation and Depot (Cileunyi, Bandung)

Funding and joint venture

The China Railway Group Limited (CREC) will form a joint venture with a consortium of Indonesia's state-owned enterprises (SOEs) led by PT Wijaya Karya Tbk (IDX: WIKA) in developing the first High Speed Train (HST) in the country.[32]

On Friday, 16 October 2015, Chinese and Indonesian state-owned companies officially signed the deal to build the first high-speed railway in Indonesia.[33] The project cost was estimated to be US$5.5 billion (80 trillion rupiah). The deal was signed by China Railway International Co. Ltd. Chairman Yang Zhongmin and Dwi Windarto, the president director of a consortium of Indonesian state companies, PT Pilar Sinergi BUMN Indonesia.[34] China Development Bank has given a commitment to fund 75 percent of the project costs with loan terms of 40 years for the loan—with an initial grace period of 10 years—with fixed loan rate. CRCC will hold majority shares in the planned JV company, while WIKA holds 30 percent and small portions for local toll operator PT Jasa Marga Tbk (IDX: JSMR), train operator PT Kereta Api Indonesia and plantation company PT Perkebunan Nusantara VIII.[32]

In late August 2016, it was reported that the China Development Bank had not yet disbursed funds for the loan and that PT Kereta Cepat Indonesia-China, the consortium executing the project, was not sure when funds would become available.[35]

2016
  • January Indonesian president Joko Widodo attended a ground breaking ceremony near Jakarta and announced that the project had commenced.
  • May Continual delays in acquiring land were being reported. The president of the Indonesian joint venture firm managing the project, PT KCIC (Kereta Cepat Indonesia China), Hanggoro Budi Wiryawan, expressed frustration at the Dept of Transport requirement that all of the land needed for the project (estimated to be 600 ha) be acquired before final construction permits could be issued. Hanggoro argued that it was more usual for construction permits to be issued when just 10% of the required land for a project had been acquired. He said that the delays in the Dept of Transport were unreasonable. Issues surrounding acquisition of land were complicated by the fact that the main station at the Jakarta end was planned to be on land occupied by the Indonesian Air Force at Halim Perdanakusuma International Airport. It was not clear whether the Air Force was prepared to release the land.
  • August The Minister for State-Owned Enterprises, Rini Soemarno, said that the process of issuing permits for the project was running smoothly after earlier delays. She said that she believed that construction on the railway could start within a week.
  • November 82 percent of land needed has been acquired, but bank funding will only be attainable after 100 percent land is acquired.[36]

2017
  • March The project is stalled due to land, finance and security issues. Among others is the Indonesian Air Force reluctance to release 49 hectares of the lands surrounding Halim Perdanakusuma Airbase on the southeastern outskirts of Jakarta for the construction of the station.[37]
  • April PT Kereta Cepat Indonesia Cina (KCIC) and High-Speed Railway Contractor Consortium (KSRCC) signed an engineering, procurement, and construction (EPC) contract on the Jakarta – Bandung bullet train on April 4, 2017. Contractors will proceed with construction following the contract signing.[38]

2018
  • January The Jakarta Post referred to the project as "stagnant" and Maritime Affairs Coordinating Minister Luhut Binsar Pandjaitan announced that a review would be conducted to consider whether a high-speed rail system really was needed between Jakarta and Bandung because "the cities are only 140 kilometers apart."[39]
  • March It was reported that government agencies (the National Land Agency and the Agrarian and Spatial Planning Ministry) suspected that there had been maladministration in the acquisition of over 1,800 plots of land for the project. As a result, approval of permits for the use of land for the project had been delayed.[40]
  • April State-owned enterprises minister Rini Soemarno, on a visit to Beijing, said that project construction would start in the coming month, May, and that she hoped that perhaps construction could start even sooner. She also said that she hoped land acquisition could be completed by the end of May.[41]
  • July Three lawsuits received legal approval from the courts to proceed with claims seeking compensation for their properties affected by the project. Meanwhile, the developer of the project PT Kereta Cepat Indonesia-China said that the progress of the project would not be affected by the lawsuits. The main financier of the project, China Development Bank, had disbursed $170 million in May and was due to disburse another $1.1 bn before the end of July.[42]

2019
Walini Tunnel at celebration of breakthrough.
  • March The boring machine arrived and was assembled. Drilling started under the Jakarta-Cikampek Toll Road between KM 3+600 - KM5+800. Progress Reached 13%[43]
  • May The Walini tunnel become the first breakthrough tunnel in the high speed rail projects. Celebrated by many group of minister including a Minister of State-Owned Enterprises Rini Soemarno and the West Java Governor Ridwan Kamil. According to Rini Soemarno, progress reached 17.5% but estimated to be 59% in late 2019,[44] and land acquisition was almost 100%.[44] Ridwan Kamil hoped to commence the high speed rail operation in 2021.[45]
  • September The construction progress reached 32.8% and land acquisition progress reached 99.0%.[46]
  • October Construction progress 38.2%.[47]

2020

In mid-February 2020, construction progress reached 44 percent and land acquisitions reach 99.96 percent.[48] Due to the COVID-19 pandemic, work of the project has been halted temporarily, resulting in the delay of the targeted finish of construction and start of the operation.[49] Three months later, construction progress reached 48.3 percent and the construction works resumed, which follow government's health and safety measures, such as social/physical distancing in response to the pandemic.[50] In September, Director of KCIC Xin Xuezhong stated that construction progress reached 60 percent and land acquisitions reached 100 percent.[51][52]

Jakarta–Surabaya

In March 2017, Indonesian Government selected Japan as the partner for the revitalization of the railway connecting Jakarta and Surabaya. The project aims to upgrade the speed of trains between two major Indonesian cities to higher-speed rail with operating speeds of between 140 and 160 kilometers per hour (km/h). Construction will eradicate level grade crossings and/or constructing elevated railways. Currently, there are around 988 level grade crossings between Jakarta and Surabaya, which hinder the security, intensity and the speed of trains. The project phase-1 will run on a new railtrack from Jakarta to Semarang, whereas the phase-2 will run on upgrade the existing railtrack from Semarang to Surabaya.[53][54]

Japan, which previously lost to China to be associated with the high-speed railway connecting Jakarta and Bandung is the partner in this project.[55] Japan International Cooperation Agency (JICA) had joined the Agency for the Assessment and Application of Technology in conducting a feasibility study of the project.

References
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