Sino-Indonesian joint venture on track for high-speed railway

However, KCIC, still needs to secure the overall construction permit before it can begin building the railway track in earnest.
KCIC is a consortium consisting of China Railway Corporation and four Indonesian state-owned companies.
During the signing of the agreement, which gives KCIC a fixed concession period of 50 years, on Wednesday, Transportation Minister Ignasius Jonan promised to issue the necessary permit this week.
Hermanto Dwiatmoko, the Transportation Ministry’s director-general for railways, was reported to have had a private, lengthy discussion with Jonan before the announcement of the signing.
KCIC president director Hanggoro Budi Wiryawan confirmed the news, stating that the permit had been signed by Jonan. He said the construction permit for the first 5 kilometres of the project would be signed shortly afterward.
He said all of the necessary documents had been submitted but he could not confirm whether construction work would start right away next week or whether the company would need to make more preparations.
Also, the company has not retrieved the loans from China Development Bank, which make up roughly 75 percent of the US$5.1 billion (Bt177 billion) slated for the project. The delay in the signing of the concession agreement was blamed for the delay in the loan.
The project’s groundbreaking ceremony was conducted in January and was attended by Indonesian President Joko “Jokowi” Widodo.
The two-month vacuum between January’s groundbreaking and the commencement of the project was blamed on the failure of KCIC to submit the necessary documentation.
Meanwhile, Hanggoro said KCIC had started preparing the necessary documents to get the construction permit for the full project. He planned to submit the documents next month at the latest.
Based on the concession agreement, KCIC gets the right to operate the Jakarta-Bandung railway line for a span of 50 years, starting from May 31, 2019.
The company estimates that it will break even within 40 years.
The ministry has also set a three-year time limit for the construction of infrastructure from the issuance of the construction permit.
The flagship project between Jakarta and Bandung spans 142.3km and will stop at four stations, namely Halim, Karawang, Walini and Tegalluar.
In one point of the concession, the ministry also granted KCIC the authority to approve or disapprove of other high-speed-railway operators that intend to use its track.
The ministry also decided to give KCIC the exclusive right to operate the railway track. The ministry will allow other rail operators to use the track and build stations as long as the stations are about 25km away from a station belonging to KCIC. Previously, KCIC wanted the distance to be 50km.