Indonesia's High-Speed Headache
Mar. 2, 2016
Indonesia's first high-speed rail project is in trouble, as questions arise over China's ability to deliver promises made in its winning bid.
The $5.5-billion project would connect the capital, Jakarta, to a major city called Bandung. The finished train line was expected to cut travel times between the two cities by over 2 hours.
A Chinese bid beat Japan to the contract last year in a fierce competition for construction rights. Japan had hoped to export its Shinkansen bullet-train technology, but Indonesia teamed up with China.
Officials said they chose the winning bid for 2 main reasons. It promised no financial burden for Indonesian state budget, with the funding coming from Chinese loans.
China's plan also offered a faster delivery time of just 3 years -- 2 years shorter than Japan's proposal. But just one month in, construction is stalled and the project appears to be derailed.
In January, a groundbreaking ceremony was held for the highly anticipated project.
"Today, we can finally start the construction of the high-speed railway between Jakarta and Bandung," Indonesian President Joko Widodo said at the event.
A joint Chinese-Indonesian firm was scheduled to build the railway by 2019. But now some are questioning if that was nothing but hype.
Construction on the project has yet to begin. Only trucks can be seen at the planned construction site, but not a single worker. The government says the company is to blame.
A senior official from the transportation ministry says the firm has not submitted the required documentation.
Blueprints for the project only cover 5 kilometers of the 140-kilometer route. And some of the documents that were submitted have not yet been translated from Chinese.
"We were surprised when we saw the documents. We cannot examine them because we cannot read them," said Hermanto Dwi Atmoko, an official with the Indonesian Transportation Ministry.
The ministry told the firm to re-submit them after translating everything into Indonesian or English.
Another issue is earthquake safety measures. There are three active fault lines along the planned route, and officials say the preventative measures are insufficient.
"We cannot approve the project unless the firm follows the necessary procedures," Dwi Atmoko said. "The timing of that depends on the firm."
The company is also requesting a legal guarantee from the Indonesian government. Its original bid didn't ask for a financial guarantee. But there are now concerns over whether China will keep its word, and that Jakarta will not be required to shoulder any of the financial burden.
"We should carefully study how serious China is about the project -- and whether the country will make it a priority while it's dealing with its economic slowdown," said Roem Kono, a lawmaker in the Indonesian House of Representatives.
The joint-venture firm in charge held an emergency news conference to address the delays. Company officials hit back at the government, and blamed the uncertainty on its lack of approval.
That's not good enough for some Indonesians, and they're voicing their disapproval.
"To get the railway built quickly, the firm in charge has skipped over procedures that they should have followed," said one young protester. "We're against the hurried implementation of development projects such as this."
NHK World's Fransiska Renatta joined anchors Aki Shibuya and Sho Beppu in the studio from Jakarta.
Shibuya: So Fransiska, this is such a big project for Indonesia. Why couldn't they avoid this kind of situation?
Renatta: I think Indonesian President Joko Widodo probably needed to hurry. It's estimated the project will take 3 years to complete -- the same time frame as his remaining tenure. With the next presidential election in 2019, Joko apparently wants to witness the completion while he's in office, and highlight this as one of his major achievements.
Beppu: But look, China does have a reputation for getting big projects done quickly. But why was not that the case this time?
Renatta: The people behind the China-led joint venture probably made a major miscalculation. They relied too much on their track record in China building high-speed rail links over a quick timespan, and thought they could apply the same methods in Indonesia without any adjustment. A political expert backs that view.
"China where you have one very centralized government decision-making through the communist party, and in Indonesia where you have highly de-centralized decision-making. I think 3 years for project of this scale and the nature is very optimistic."
Paul Roland, Analyst, Reformasi Weekly Review
Shibuya: Well the project is off to a rocky start. So what comes next?
Renatta: Consortium officials say they'll place priority on gaining construction approval for the first 5-kilometer stretch of track. But serious challenges lie ahead. About 240 hectares of farmland along the planned route would be in dispute. Negotiations to acquire the land have not yet started. There's also a lawsuit demanding construction work be suspended. The plaintiffs allege procedural issues and a failure to consider the environment. China was likely hoping this contract would serve as an example of success for its export of high-speed rail technology. But all the attention so far is on the problems that are causing the project to stall.
Beppu: Well Fransiska, thank you.
The problems in Indonesia arise as China aggressively pursues other high-speed railway contracts in Asia and the US. Its bids are typically low-cost, with a short construction period. A close watch is being kept on whether China can deliver on its promises.