The railway connecting Jakarta and Bandung in Indonesia has been introduced as Southeast Asia’s first-ever high-speed railway. This railway, constructed under China’s Belt and Road Initiative (BRI), was inaugurated by President Joko Widodo on October 2. With trains traveling at speeds up to 217 miles per hour, it is the fastest railway in Southeast Asia.
President Widodo emphasized the significance of this high-speed train in modernizing mass transportation, making it efficient and environmentally friendly. The project, costing $7.3 billion, was developed by PT Kereta Cepat Indonesia-China (PT KCIC), a joint venture between an Indonesian consortium of four state-owned companies and China Railway International Co. Ltd. The trains are adapted to suit Indonesia’s tropical climate and equipped with safety systems to respond to emergencies. The railway can accommodate up to 601 passengers.
Ticket prices have not yet been finalized, but PT KCIC estimates that fares will range from 250,000 rupiah ($16) for second class to 350,000 rupiah ($22.60) for VIP seats. However, the railway project has faced delays and setbacks due to land ownership disputes, environmental issues, and the COVID-19 pandemic. Initially scheduled to open in 2019, it was postponed.
This rail deal was signed in October 2015, with China providing 75 percent of the financing through a loan from the China Development Bank. The remaining 25 percent was funded by the consortium. The project’s cost has escalated from $4 billion to $7.3 billion due to rising raw material prices and other expenses. Indonesia sought additional financing from China to cover the cost overruns.
Despite the railway’s completion, investment returns have been jeopardized by President Widodo’s announcement to relocate the nation’s capital from Jakarta to East Kalimantan in 2024. As a result, the expected demand for the railway has significantly decreased.
Notably, China’s Belt and Road Initiative has faced criticism for its “debt-trap diplomacy,” leading to concerns about the sovereignty of participating countries. Some countries, like Sri Lanka, have surrendered control of infrastructure assets to China after failing to repay debts. Italy, for example, has considered exiting the BRI due to the lack of economic gains from its participation.
It is important to note that this report includes additional information about China’s Belt and Road Initiative and its criticisms, which have been summarized for brevity.