China-funded Indonesian rail link may take 40 years to become profitable

Consortium expects it will take twice as long as initial estimates because of plan to move the country’s capital city, according to executive

He told a parliamentary hearing that the project – linking Jakarta to Bandung in West Java – also faces a cost overrun of about US$2 billion

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The high-speed rail link between Jakarta and Bandung is expected to be completed by June 2023. Photo: Xinhua

Published: 8:34pm, 8 Feb 2022

A consortium building a Chinese-funded high-speed rail link in Indonesia expects it will now take 40 years for its investment to become profitable, twice as long as initial estimates, due to plans to relocate the country’s capital city, an executive said.

The Belt and Road Initiative project also faces a cost overrun of about US$2 billion, bumping up estimated costs to 113 trillion rupiah (US$7.84 billion), Dwiyana Slamet Riyadi, president director of PT KCIC, told a parliamentary hearing on Monday.

PT KCIC is a consortium of Chinese and Indonesian companies building the 142km (88-mile) railway line connecting the capital Jakarta to the city of Bandung in West Java.

Because of the plan to move the capital from Jakarta to Borneo island in 2024, trains connecting the cities are expected to carry 31,215 passengers per day, down from a previous estimate of 61,157 passengers per day, Riyadi said.

“Looking at the investment value, number of passengers and ticket prices, it’s very difficult to follow the earlier feasibility study where the assumption of a return on investment will occur within 20 years,” Riyadi said, noting a break-even point would be reached in 40 years with proposed ticket prices ranging from 150,000 to 350,000 rupiah.

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