China offers US$5.5 billion investment to build high-speed railway line

Jakarta (ANTARA News) - China Railway Company (CRC) has offered to invest US$5.5 billion to build a high-speed railway line to connect Jakarta and Bandung in Indonesia.

"This US$5.5 billion is the first funding, 25 percent of which is our capital," Chief of the Engineering Team of CRC He Huawu said during a press conference here on Thursday.

The remaining 75 percent of the investment will be financed by a joint venture scheme.

He pointed out that the US$5.5 billion investment was not the real value of the required investment for the project.

"If you compare this (Chinese) proposal with those of others, you need to pay attention to the correct preconditions," he remarked.

The CRC proposal offers comprehensive and integrated development, from the pre-construction to post-construction phase, which will meet standards of safety and comfort.

"We would like to point out that the cost (of the construction) of every kilometer (of the railway line) is lower than those proposed by others," He observed.

He further noted that CRC does not need any financial guarantee from the Indonesian government, as the risk will be borne through cooperation with a local partner, which will be state-owned construction company PT Wijaya Karya.

With regard to the interest rate of the venture, He admitted that he could not reveal too much but guaranteed that the Chinese would offer the most favorable and rational rate.

"I am not going to tell you the exact rate, but I am going to tell you that our rate will be the most favorable and rational," he affirmed.

Furthermore, the US$5.5 billion Chinese investment includes the cost of the preliminary phase and the construction process, as well as that of further development.

"The figure also includes the cost of evaluation and inspection after the construction is complete," he pointed out.

Moreover, with regard to winning the bid, Chairman of the National Development and Reform Commission of China Xu Siaoshi met with President Joko Widodo on Monday, August 10, to deliver the results of its feasibility study on the Jakarta-Bandung high-speed railway line.

In addition, Japan, which is another competitor, had submitted the results of its feasibility study on the project to the Indonesian government in 2014.(*)