'Commercial projects should not be politicized': expert
The Indonesian government is looking toward Japan to turn a 750-kilometer-long existing rail line - linking its capital Jakarta and second-largest city Surabaya - into a higher-speed railway, the Tokyo-based Kyodo news agency reported on Monday, suggesting that slow progress on the Jakarta-Bandung high-speed rail project has sparked a confidence issue toward China.
The Jakarta-Bandung high-speed rail project, the nation's first high-speed railway, is being developed by the China-Indonesia joint venture PT Kereta Cepat Indonesia China (KCIC).
The Jakarta-Bandung enterprise only received construction permits for the entire length on August 21, seven months after ground was broken on the project, according to media reports.
In recent years, the transfer of second-hand trains from Japan to Indonesian operators, technical assistance and staff training has harvested trust in Japan, and these factors have paved the way for Japanese firms to win orders, the Kyodo news report said.
Confidence factor
Satria Sambijantoro, an Indonesian researcher at Peking University, said Indonesia has had a long history of investment with Japan, who has been one of its biggest and most loyal investors for decades.
"China, meanwhile, has only committed themselves to Indonesia in the last two years under President Jokowi. Thus, it is understandable that the Indonesians are not used to doing business with China. It will take time for Indonesia to adapt to the working culture of China, a nation known for its effective and centralized system," Sambijantoro told the Global Times Tuesday.
"To some extent, the 'China way' of executing the Jakarta-Bandung railway project might not be compatible to the way infrastructure projects are built in Indonesia, particularly those related to land procurement and localization of the supporting infrastructure. There have been doubts as well about China's commitment to the technology transfer of high-speed rail to Indonesia." Sambijantoro said, noting that it is important that both parties adapt to each other.
The China-led 142-kilometer-long Jakarta-Bandung venture is set to have a maximum designed speed of 350 kilometers per hour. The project is set to cost $5.13 billion.
Meanwhile, the Jakarta-Surabaya upgrade aims to enable trains to travel at a speed of 150 kilometers per hour and is expected to cost between $2.5 billion and $3 billion.
"One is a high-speed railway, the other is not, technically speaking they are on two different levels. If you do want to connect one with the other, then it is in the political sense," said Xu Liping, a research fellow from the National Institute of International Strategy at the Chinese Academy of Social Sciences.
"Losing the Jakarta-Bandung high-speed railway project to China is considered a loss of face in Japan, which has a long economic relationship with Indonesia," Xu said.
Though Xu warned that commercial projects should not be politicized.
"In Indonesia, they will do the project via open tendering and Chinese companies can naturally take part to bid against other bidders, deciding whether to nail down the project according to the project's specifics and profitability," Xu told the Global Times on Tuesday.
Chinese standards
There is a concern that a Japan-built railway could be a setback in the promotion of Chinese railway standards in Indonesia, according to Zhao Jian, a professor at Beijing Jiaotong University.
Zhao said Chinese companies should rein in their appetite in striving for another railway project in Indonesia, saying the profitability prospects of the two railways are both in question and will probably cause the operator of the railway to lose money when completed.
"A railway with a speed of 150 kilometers per hour is more suited to Indonesia," Zhao said.
Xu said that multiple sets of standards could coexist in Indonesia.
"Their intention is to not put all their eggs in one basket. and the county has many islands, and aside from the main island of Jawa, they are attracting railway builders from China, Japan and even Russia," Xu said.
The Kyodo report hinted Indonesia would turn to other countries for assistance if an agreement could not be reached with Japan on technology and price.
