China, Japan vie to build high-speed rail for Indonesia

AP News
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Posted: Aug 11, 2015 9:54 AM
China, Japan vie to build high-speed rail for Indonesia

JAKARTA, Indonesia (AP) — Indonesia's top development official said the government is studying proposals from China and Japan for construction of a high-speed rail line and expects to announce the outcome later this month.

Andrinof Chaniago, the national development planning minister, told reporters Tuesday that a decision on which proposal to accept could be made in about two weeks.

The high-speed rail, which will connect the capital Jakarta to Bandung, is part of Indonesia's 750-kilometer (466-mile) high-speed train project that would cut across four provinces on the main island of Java and end in the country's second largest city of Surabaya.

President Joko Widodo has ambitious plans to improve Indonesia's infrastructure, which could boost manufacturing and create hundreds of thousands of new jobs.

Officials have said that the final proposals made by regional rivals China and Japan followed intense high-level lobbying efforts as the two countries compete for political and commercial influence in Southeast Asia's biggest economy.

Both countries have substantial expertise in high-speed trains though China is a late-comer to the industry compared with Japan.

"We will conduct a review not more than two weeks and will make a decision soon," Chaniago said after meeting with his Chinese counterpart, Xu Shaoshi.

China and Japan have offered low interest loans and other perks as they vie to secure the rail contract.

China's embassy in Jakarta on Monday released a statement promising 40,000 new jobs in Indonesia for every year of the line's construction.

Chaniago said China estimates the line would cost $5.5 billion and is offering Indonesia 50-year loans that will charge annual interest of two percent.

Indonesia's Presidential Chief of Staff Luhut Panjaitan has said that Japan International Cooperation Agency has offered loans of $4.4 billion with a 40-year repayment period and an annual interest rate of less than one percent.

At a news conference Tuesday, Xu said China is ready to begin construction of the Jakarta-Bandung line in September and could complete it within three years.

"Our high-speed train technology is quite developed and safe," Xu said.