CHINA RAILWAY ACCESS TO INDONESIA

It’s Friday everyone! Today’s article comes from Indonesia, one of the most populous countries in the world.

A glance about Indonesia. Indonesia is an archipelago country that has a lot of islands! There are hundreds to thousands tribes in Indonesia (Betawi, Javanese, Batak, Baduy, Dayak, Chinese, etc.). A lot of foreigner friends of mine have the same impressions about their visit to Indonesia: 1) Indonesians are very nice, whenever you glare at them, they will smile at you in return; 2) The traffic jam in Jakarta is “ah-ma-zing”!; 3) Because of the impression number 2, the people there are patient, less car honks, because traffic jam is their daily feed.

Jakarta’s ‘Terrific’ Jam

China Railway Exhibition at Jakarta

So, back to the main topic. During this week, China holds a Railway exhibition in Jakarta to gain local favor as the company competes against Japan to win the first high-speed rail project in the archipelago nation, from Jakarta to Bandung. It is said that it will be 1 of the fastest trains in the world.

The current railway from Jakarta to Bandung was made during the Dutch colonial time (the Dutch colonised Indonesia for more than 3 centuries).

Dutch’s Built Railway at Bandung

The railway firm is upbeat that Indonesia will pick China as it believes it offers a win-win solution for both countries because it meets Indonesia’s needs and no government budget needed, no fiscal pressure for Indonesia.

This project would need $5.5 billion investment that covers the land, infrastructure development and train manufacturing costs. Beside, China will also provide a lending assistance with 2% interest rate annually and in 40 years span.

There is a joint venture scheme between China’s consortium and an Indonesian consortium, in which Indonesia would hold a 60-percent stake and China the remaining 40 percent.

On the other hand, China has a rival to build this project, Japan. Japan is offering a similar project that cost around $3.3 billion with a soft loan to cover 75 percent of the funding with a 0.1-percent interest rate annually and 40 years span.

Japan’s Shinkansen

Chinese ambassador for Indonesia, Ambassador Xie stated that Chinese technology is compatible with that of other major players in the sector like Alstom, Siemens and Bombardier.

“In the future, Indonesia could be free to look beyond China and choose other equipment, technology and service products … some country’s technology is not compatible with international standards, which may lead to a market monopoly,” said the ambassador.

The winner will be announced by the end of August by the Indonesia government. We’ll wait and see