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An image of a high-speed train on a track in Indonesia.

Indonesia’s High-Speed Train Project Faces Delay and Cost Overruns

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Indonesia’s High-Speed Train Project Faces Delay and Cost Overruns

by Richie
08/30/2023
in Global Trade, Market Trends

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Indonesia’s ambitious high-speed train project, funded by China and connecting Jakarta to Bandung, has encountered another delay. The trial launch of this $7.3 billion service, initially planned for completion in 2019, was postponed yet again, with the latest scheduled trial on Friday being pushed back. A spokesperson from the overseeing PT KCIC consortium, a collaboration of Indonesian and Chinese state firms, confirmed the delay, citing a pending decision from the Ministry of Transportation.

The project has faced multiple challenges, including a significant budget overrun of $1.2 billion and the need for additional safety checks. The trial service, which was first set to begin on August 18 and then moved to September 1, is now delayed with the public service launch aimed for October 1. PT KCIC attributed the previous delay to ensuring passenger safety and comfort and awaiting additional operating permits.

Local Responses and Concerns The high-speed train has met with skepticism from some residents and activists, who argue that its benefits are limited to upper-middle-class citizens due to the anticipated ticket prices of around 300,000 rupiah ($20). Meiki Paendong from the Indonesian Forum for the Environment (WALHI) in West Java highlighted the service’s lack of accessibility for the general public and poorer groups.

On the other hand, some see the service’s potential, like Ahmad Zakie, a lecturer at Padjadjaran University in Bandung. He expressed interest in using the service for its quick travel time and the experience of advanced transportation. The train, reducing travel from three hours to roughly 40 minutes, is appealing for time-constrained travelers.

Belt and Road Initiative and Indonesia’s Development Goals The Jakarta-Bandung line is part of the numerous infrastructure projects in Indonesia under China’s Belt and Road Initiative, a global infrastructure push by Chinese President Xi Jinping. Under President Joko Widodo’s leadership, Indonesia is pursuing ambitious development projects, including relocating the capital and targeting a higher GDP per capita by 2045.

Trissia Wijaya, a senior research fellow, noted a lack of alignment in risk management between China and Indonesia, a critical aspect of the project’s progress. The importance of the project for both countries was emphasized at the G20 Summit in Bali, where Xi Jinping and President Widodo observed a test-run of the train.

The service, upon commencement, will feature 11 eight-carriage trains built by CRRC Qingdao Sifang, a subsidiary of China Railway Rolling Stock, with a capacity of about 30,000 passengers per day and speeds up to 350 km/h (217mph).

Local photographer Iqbal Kusumadirezza expressed his reluctance to use the service due to the inconvenient location of the Bandung station and the high ticket costs, preferring the regular train instead.

Your source for supply chain report news updates: The Supply Chain Report. For international trade insights and tools, head to ADAMftd.com.

#IndonesiaHighSpeedTrain #BeltAndRoadInitiative #JakartaBandungTrain #ChinaIndonesiaCollaboration #PTKCIC #HighSpeedTrainDelay #TransportDevelopment #InfrastructureChallenges #WALHI #CRRC #ChinaRailwayRollingStock #JakartaBandungProject #BaliG20Summit #PublicTransport #GreenDevelopment

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