Indonesia to accept China’s high-speed rail plan, minister says

In another blow to Abe’s plans, Indonesia gave the highly coveted contract for developing its high-speed railway to China instead of Japan. Japan has entered a cut-throat competition with China to secure the tender.

“There are many infrastructure projects, not just trains, and many opportunities for the Japanese government to build infrastructure in Indonesia”, said Indonesia’s presidential chief of staff, Teten Masduki.

Head of the Indonesian National Development Planning Agency Sofyan Djalil told Japanese Chief Cabinet Secretary Yoshihide Suga in Tokyo yesterday that Indonesia plans to welcome the Chinese proposal, Mr Suga said at a press conference. The railway is to link Jakarta with the West Java provincial capital of Bandung.

“Japan offered the best possible proposal”, he told reporters.

The Japanese government spokesman doubted the feasibility of the Chinese proposal to build the railway without Indonesian funding. “I can’t understand that at all”.

But on September 4, the Indonesian government scrapped the project, saying, “Both of the proposals by Japan and China place an intolerable financial burden on Indonesia”.

President Joko Widodo’s administration preferred China’s proposal because it was less burdensome and promised a larger share of technology transfer than Japan.

State-owned enterprises minister Rini Soemarno has said Japan must drop its requirement for government guarantees if it wants to stay in the race.

Japan’s proposal called for a government guarantee. “We were expecting transparency and fairness from the Indonesian government”. He pledged upon taking office in October to overhaul Indonesia’s ageing roads, railways and ports but has struggled to get his agenda moving. China has less experience (it started to develop its first high-speed train service in the late 2000s) but has shown remarkable growth in recent years (the country now claims that over half of the world’s current 23,000 km of high-speed railway tracks is made by China). In 2011, one of its trains crashed, killing at least 40 people and injuring 200.

Lao PDR officials confirmed Tuesday that China would build a rail line through the country to link Yunnan province in China with Vientiane the capital of Laos.