Yahoo – AFP,
16 Oct 2015
China and
Indonesia have officially sealed the deal for a medium-speed
railway project
connecting Jakarta and Bandung. (AFP Photo/Bay Ismoyo)
|
Chinese and
Indonesian state-owned companies Friday signed a $5.5 billion deal to build the
first high-speed railway in Southeast Asia's top economy, after Beijing beat
Tokyo to win the construction project.
The line
will connect the Indonesian capital Jakarta with the mountain-fringed city of
Bandung, some 160 kilometres (100 miles) away, and is a key part of President
Joko Widodo's plans to overhaul the archipelago's infrastructure and attract
investors.
Japan was
long expected to build the railway but China entered the contest earlier this
year, and Tokyo's bid was rejected last month after a chaotic bidding process
that infuriated the Japanese.
On Friday
the chairman of state-owned China Railway International, Yang Zhongmin, signed
a deal with a consortium of Indonesian state companies to form a joint venture
to build the railway, with construction set to start next year and the line to
begin operating in 2019.
"This
high-speed train will make it easier for the public to travel," he told
reporters in Jakarta, where the deal was inked. "This major project will
also provide major employment opportunities and boost the economy."
State-owned
China Development Bank will provide 75 percent of the funding, with the rest
coming from the Chinese railway company and Indonesian consortium.
The railway
line will not need any financing from the Indonesian government, nor a
government guarantee. One reason that Indonesian officials gave for rejecting
the Japanese bid was that it would require government funding.
The
high-speed train route will cover eight stations from Jakarta to Bandung, and
the train will travel at around 250 kilometres (150 miles) an hour.
The
Indonesian government repeatedly changed its mind about the railway project,
before eventually agreeing to accept China's bid for a high-speed line.
The chaotic
bidding process and final decision angered Tokyo, which is increasingly
competing with Beijing for influence in Asia, with chief government spokesman
Yoshihide Suga slamming it as "extremely regrettable".
Japan's
loss came despite its reputation as a world-class train maker, famed for its
"shinkansen" bullet trains.
China has
built thousands of kilometres of high-speed railway in recent years, but its
safety standards have come under scrutiny -- a 2011 crash killed at least 40
people and injured about 200.
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