High Speed Train Project To Be Build By State Companies

Jakarta (Antara Bali) - Minister of State Enterprises (BUMN) Rini Soemarno said a consortium of state companies will carry out the speed train project, earlier offered to Japan and China.

A number of leading economists has raised controversy over the project saying it is not feasible  and had no urgency amid the economic slowdown.

"It certainly to be carried out. President Joko Widodo has told the BUMN ministry to carry on with the plan," Rini said here on Friday.

China and Japan have submitted their bids for the mega project , and the winning bidder  was to be announced next week.

China has proposed to build the project with a cost of Rp75 trillion and  Japan came with  a proposal to cost Rp85 trillion.  
The government, however, after receiving recommendation from a team of appraisers decided to reject the proposals both from China and Japan as it could not provide fund for the project from the state budget  and guarantee for financial loans.

The project has to be carried out on business to business schemer without the involvement of the government other than as the regulator, Rini said.

Instead the government asked the BUMN ministry to build medium speed train with speed of 200-250 kilometers per hour. The original plan was a train with a speed of 300-350 kilometer per hour, the class of "Shinkansen".

Rini said the project is needed to boost industrial development, especially textile industry  in areas between Jakarta and Bandung.
She said the government especially wanted to stress that the project could be built without government guarantee and no fund from the state budget.

She said the BUMN ministry already formed a consortium to carry out the project  with PT Wijaya Karya Tbk (WIKA) as the lead  consortium   and members including  PT Jasa Marga Tbk, PT Kereta Api Indonesia (KAI)  and PT Perkebunan Nusantara (PTPN) VIII.

"The consortium has been asked to work fast to carry out comprehensive study of the project," she said.

The study would cover the speed needed, the cost, number of stopping stations as well as property development in area along the track.

The fund is also expected from investors, she said, "we could not yet name the sources of fund but it is a long term investment with investment payback at least 30 years."

Coordinating Minister for Economy Darmin Nasution said he has explained the reason for the cancellation of the high speed train project to the foreign bidders.

Darmin said he had met with Japanese Ambassador and asked if Japan is still interested under the new conditions including non involvement of the government in financing.

He said the Japanese Ambassador Yasuaki Tanizaki though 'slightly' disappointed,  could understand the reason given by the government.

He said the Japanese ambassador could not give immediate answer to the question whether Japan would be interested in the medium speed train project under business to business scheme.  (WDY)