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Jakarta-Bandung high-speed rail project built by China already more expensive than higher quality Japan's proposal

    Yi  Wei
    By Yi Wei

    Serious cost overruns by construction of Jakarta-Bandung high speed railway create discussions in Indonesia. Deputy Speaker of the Indonesian House of Representatives, Rachmat Gobel said State Revenue and Expenditure Budget should not be allocated to the Jakarta-Bandung high-speed rail project. His opinion says the high speed rail project should be left to private investors. It's better to use the money of APBN for example for economic recovery and basic infrastructure Rachmat Gobel.

    Project was already suspended before for problems. Later plans to transfer money from State Revenue and Expenditure Budget proposed.

    Jakarta Bandung Fast Train (KCJB) construction project built by KCIC (PT Kereta Cepat Indonesia China) a consortium of China and Indonesia companies. In consortium there are 9 companies organized under two groups. From China, there is China Railway which has China Railway International Company Limited, China Railway Group Limited, Sinohydro Corporation Limited, CRRC Corporation Limited, and China Railway Signal and Communication Corp. From Indonesia PT Pilar Sinergi BUMN which has 4 SOEs, Wijaya Karya, Jasamarga, Perkebunan Nusantara VIII, and KAI.

    There is debate of why work was given to Chinese companies. There were two bids. China won the tender. China submitted a proposal for USD 5.5 billion. Japan submitted a proposal with a value of USD 6.2 billion. Moreover China did not require government guarantees unlike Japan. 

    Although China's proposal was USD 5.5 billion, price of project went first to USD 6.07 billion and then to USD 7.97 billion. It is already much higher than Japanese proposal of USD 6.2 billion. Everybody thinks if Japan build, quality would be better. Even Deputy Speaker of the Indonesian House of Representatives, Rachmat Gobel is quoted said " in terms of quality, Japan is definitely much better".

     

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