China won the rights to build a railway line in Indonesia as the Southeast Asian nation tries to upgrade its infrastructure to drive economic growth.
China Railway International Co. Ltd and a consortium of Indonesian state companies will build the rail line from Jakarta to Bandung, and plan to compete for other projects in the region, Sahala Lumban Gaol, the chairman of the joint venture, said in Jakarta on Friday. The project will be mostly funded by China Development Bank and won’t use the Indonesian government budget or have a state guarantee, he said.
Indonesia’s first high-speed train project comes after the government decided to scrap plans for a state-funded bullet train to Bandung after bidding by both China and Japan, leaving only China interested in a business-to-business deal. President Joko Widodo is planning to revive flagging growth in Southeast Asia’s largest economy through infrastructure building, though budget revenues are falling short of targets this year.
“We hope this new company will compete outside Indonesia for high speed railway projects,” said Gaol.
The Indonesian companies forming the joint venture, PT Pilar Sinergi BUMN Indonesia, include state construction company PT Wijaya Karya, railway operator PT Kereta Api and toll road builder PT Jasa Marga. The project is expected to take three years with trains to run at 250 kilometers an hour.
For China, which will hold 40 percent of the venture, it will be the first overseas high speed railway using Chinese technology, said Xie Feng, China’s ambassador to Indonesia.
