INDONESIA’s 142km Jakarta - Bandung high-speed project is facing further delays as the country’s Transport Ministry and three consultants push back against plans by the Chinese-led consortium building the new railway to open the line for commercial services in August.
According to Reuters, in an internal document seen by the news agency, the Transport Ministry, PwC, Mott MacDonald and local law firm Umbra have suggested that full commercial operation should be delayed until January 2024, rather than August as has been proposed.
The report says that there is “a risk that the target of commercial operation in August could be delayed to complete all construction by December 31.” This work reportedly includes an incomplete station.
The Chinese participants in the PT KCIC consortium building the line are, however, pushing for the issuance of a full operation worthiness certificate for the line, according to Reuters, which references a 48-page “Progress Update” presentation dated May 14 as the source of the new information.
According to Mr Septian Hario Seto, deputy minister of the Coordinating Ministry for Maritime and Investment Affairs, the intention as it stands is to begin free trials with passengers in mid-August, followed by paid trips in September and completion of the incomplete station expected in November. Yet the reports cast these plans into doubt.
Testing on the line commenced on May 22 while tracklaying was completed in March. China Railway International is working with China Railway Bureau Group, the China Academy of Railway Sciences as well as local Indonesian companies on the testing and commissioning work.
Construction is the responsibility of the PT KCIC consortium, which was appointed in 2015 to deliver the project, overcoming a rival Japanese consortium. However, the project has been beset by delays due to land ownership issues, questions over its economic impact and the Covid-19 pandemic. The cost of the project is already nearly $US 2bn over the initial budget of $US 6.07bn.
PT Kereta Cepat Indonesia-China (KCIC) is a consortium of state-owned Indonesian companies (60%) and China Railway Engineering and other Chinese companies (40%). The line has entirely adopted Chinese railway equipment, the first time China has exported all the technology for an international high-speed project.
Outstanding payments
Another internal document seen by Reuters indicates that the project has accumulated at least $US 381.75m in outstanding payments. Reuters states that financial restructuring at PT Wijaya Karya Tbk (Wika), an Indonesian state-owned construction firm with an indirect minority stake in the consortium, is hitting the working capital needs of the project.
Negotiations are said to be underway between Indonesia and China over an additional $US 560m loan for the project. However, the two parties are seemingly apart on agreeing a rate for the loan, with Indonesia seeking 2.8% for the portion of the loan in yuan, which is lower than the China Development Bank’s offer of 3.46%, Reuters reports, citing a second set of documents dated May 18.
Wika corporate secretary, Mr Mahendra Vijaya, says the company has the financial capacity to finish the remaining work but it also needs the consortium to pay for the work it has already completed, according to Reuters.
The Jakarta - Bandung line is a flagship project of Indonesian president, Mr Joko Widodo. With a general election scheduled for next year, delays to the opening of the line are likely to be a blow to his re-election campaign.
The line will be operated using a fleet of 12 350km/h eight-car Yawan high-speed trains, supplied by CRRC, which will offer a journey time of 40 minutes between the two cities, down from 3h 40min at present.
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