Indonesia’s China-built high-speed rail project on track despite cost overrun of US$2 billion
- President Joko Widodo, who inspected a new railway station, said the project was 88.8 per cent complete and its commercial launch is expected in June 2023
- The 142-km line will connect the capital Jakarta with West Java’s Bandung
Jokowi, as the president is popularly known, said the project was 88.8 per cent complete and its commercial launch is expected in June 2023.
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KCIC has said the project is facing a cost overrun of about US$2 billion, raising the estimated total cost to 113 trillion rupiah (US$7.36 billion). China estimates the project is less than US$1 billion over budget, according to Koran Tempo newspaper.
KCIC’s president director Dwiyana Slamet Riyadi confirmed the discrepancy in cost calculations, saying negotiations are under way to resolve it.
“We hope the negotiations … regarding cost overrun and financing can be quick so this does not disturb the progress,” said Dwiyana, who accompanied Jokowi on Thursday.
Indonesian state companies, including Wijaya Karya and PT KAI, control 60 per cent of KCIC, while China Railway Engineering Corporation and other Chinese companies control the rest. The project is funded by a loan from China Development Bank.
The Indonesian firms have been lobbying their Chinese counterparts since last year to fund the rise in costs, while a capital injection from the Indonesian government is also awaiting authorities’ approval.