The 142-km high-speed rail connecting Indonesia’s capital Jakarta with another large city Bandung, part of China’s Belt and Road Initiative, has faced numerous accusations from Indonesians during the project’s closing stage.
In August of this year, KCIC, the consortium building the railway, requested the Indonesian Ministry of Transportation to extend the concession period from 50 to 80 years. The company’s president, Dwiyana Slamet Riyadi, explained on December 8 before the Fifth Committee of the Indonesian Parliament, which is in charge of transportation and public works, that there had been a significant change in the project’s business environment.
However Lasarus, S.Sos., an Indonesian Parliament member and chair of the Committee, is skeptical about the extension of the concession rights, according to detik.com, an Indonesia news website. He pointed out that many people complained about the project, arguing that since the business environment is not good, no more public expenditures should be used on it.
The news was picked up by major media in Indonesia that day and drew widespread criticism. Muhammad Said Didu, a former senior government official, posted on his personal Twitter account that KCIC had deceived Indonesians in five aspects. China claimed that it was cheaper than Japan’s high-speed rail construction proposal, that the project was feasible, that it did not require government guarantees, that it did not tie up public coffers, and that the operating rights were extended from the 50-year requirement to 80 years. The post received thousands of retweets and likes.
According to Chinese official media, construction of the railway officially began in January 2016 and was set to be completed in the second half of 2019, with the concession running for a total of 50 years from May 2019, with a total cost of US$5.135 billion negotiated between China and Indonesia. However, Detik.com noted that the total investment for the project was later renegotiated to US$6 billion. On top of that, the Indonesian Financial Supervisory Authority (BPKP) assessed that the construction cost exceeded the budget by US$1.49 billion, while the Chinese side admitted to only US$980 million, a disagreement of up to US$500 million.
An Australian engineer told Radio Free Asia, “There is a widespread issue of underbidding in China’s construction contracts in Asian, African and Latin American countries, as well as in Australia’s iron ore projects, followed by constant requests for more money during the operations. This has often resulted in debt traps, as in the case of Sri Lanka’s Hambantota port, which has put a big financial burden on the country.”
Source: Radio Free Asia, December 12, 2022