JakartaBandung High Speed Railway Tentang Kami WIKA adalah satu-satunya kontraktor asal Indonesia yang dipercaya dalam pembangunan Proyek Kereta Cepat Jakarta-Bandung. Presiden Joko Widodo menunjuk WIKA secara langsung sebagai kontraktor yang mengerjakan KCJB, hal ini membuktikan kualitas WIKA sebagai kontraktor BUMN tidak diragukan lagi.
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content. Investor Daily - Pemerintah Suntikkan Rp4,3 Triliun ke Proyek KA Cepat Jakarta-Bandung 13 October 2021 By Thresa Desfika, Triyan Pangastuti, Muawwan Daelami, and Arnoldus Kristianus Jakarta â The government is investing trillion in PT Kereta Api Indonesia KAI to cover the lack of funds for the construction of Jakarta-Bandung High-Speed Railway that increased by around Rp27 trillion or 31% from the original cost. The investment is provided in the form of an additional state capital participation PMN for PT KAI, one of the four SOEs State-owned Enterprises in PT Pilar Sinergi BUMN Indonesia. The construction of the high-speed railway that spans 142 km is predicted to be finished at the end of 2022, which is 12 months later from the original schedule. Other SOEs in PT Pilar SInergi BUMN Indonesia PSBI are PT Wijaya Karya Persero Tbk, PT Jasa Marga Persero Tbk, and PT Perkebunan Nusantara PTPN VIII. To work on the high-speed railway, PSBI is cooperating with a Chinese company by establishing the KCIC consortium. PSBIâs ownership portion in KCIC reaches 60%, while the Chinese company owns the remaining 40%. When the consortium PT Kereta Cepat Indonesia China KCIC was established, KCIC was obligated to provide a capital of around trillion. This is 25% of the estimated cost of Jakarta-Bandung High-Speed Railway worth US$ billion or trillion in total. PT Pilar Sinergi BUMN Indonesia that owns 60% of KCIC shares must provide a capital of around trillion, while the Chinese consortium Beijing Yawan that owns 40% of the shares must provide trillion. With 25% provided from their own capital, the remaining 75% or around trillion US$ billion will be provided by a loan from China Development Bank. PT Kereta Api Indonesia Persero or KAI President Director, Didiek Hartantyo, said that, as a follow-up action from Presidential Regulation Number 93/2021 that appointed KAI as the new leader of PSBI, the PMN for KAI was prepared to provide the base equity capital for Jakarta-Bandung High-Speed Railway. Previously, PSBIâs leader was PT Wijaya Karya Pesrero Tbk as they owned 38% of the shares, while KAI owned 25%, PT Jasa Marga Persero owned 25%, and PT Perkebunan Nusantara PTPN VIII owned 12%. The trillion PMN will be used to cover the lack of capital from the SOE consortium, Rp240 billion from WIKA, Rp440 billion from KAI, Rp540 billion from Jasa Marga, and trillion from PTPN. âSo, the trillion PMN will be used to provide the base equity capital,â Didiek said when he was contacted by Investor Daily on Monday 11/10. He explained that, to work on the high-speed railway project, PSBI established a joint venture with a Chinese consortium, Beijing Yawan, called PT Kereta Cepat Indonesia China. The fund required for the high-speed railway spanning 142 km reaches US$ billion. Special Staff for SOE Minister, Arya Sinulingga, explained that, previously, the funding would be provided from the state budget as the four SOEs involved in the project was impacted by the Covid-19 pandemic, which hindered the capability of the state-owned companies in financing the cooperation project between Indonesia and China. âThis is what forces the government to provide funding so that the high-speed railway can be excellently constructed,â Arya said to an interviewer on Sunday 10/10. In article 4 paragraph 2 of Presidential Regulation Number 93 of 2021, it is mentioned that other funding can be provided from the state budget to maintain the progress of a national strategic project by considering the fiscal capacity and sustainability. Then, paragraph 3 of article 4 states that financing can be provided from the state budget in the form of state capital participation for the SOE consortium leader and/or guarantee for the SOE consortium leader. âPresidential Regulation Number 93/2021 appoints PT KAI as the consortium leader, while the previous leader was PT Wijaya Karya Tbk. So, this is nothing. The issue is only that [the SOEs are impacted by the pandemic]. Wherever you go, in almost all countries, the government is involved in their high-speed railway project. Almost all countries are like that,â Arya said. He added that the construction progress of Jakarta-Bandung High-Speed Railway project had reached 80%. With funding from the government later, Arya continued that the project completion was expected to be accelerated. Cost overrun On a separate occasion, SOE Deputy Minister, Kartika Wirjoatmodj, revealed that, previously, there were several issues regarding Jakarta-Bandung High-Speed Railway. First, regarding the initial capital. According to him, PT PTPN VIIIâs plan to provide additional capital in the form of lands in Walini in West Java was rejected by the consortium. âPTPN VIII was planning to increase the capital in the form of lands in Walini. In its development, the consortium KCIC does not receive contribution in the form of lands, only cash. PTPN VIII does not have the capability to provide cash of that amount,â Kartika Warjoatmodjo, familiarly called Tiko, said. Besides that, he continued that Jasa Marga was also planning to provide capital in the form of a right of way ROW on their toll roads. However, a ROW turns out can only be provided by the State Asset Directorate General of the Finance Ministry. âThis misunderstanding on ROW is due to a lack of legal study at the early stage. Furthermore, capital from WIKA and KAI are also still lacking,â he said. To cover the lack of capital, Tiko continued that KAI was proposed to receive a state capital participation of trillion this year. The fund will be included in the 2021 additional PMN. âWe expect that the culmination [of the lack of the capital from Jasa Marga and PTPN VIII] and the lack of the additional capital from WIKA and KAI can be provided by the PMN. The PMN through KAI that will be used to smooth out [the construction of] Jakarta-Bandung High-Speed Railway is required as the companies are under pressure from the Covid-19 pandemic,â Tiko stated. Furthermore, Tiko said that the second issue regarding the Jakarta-Bandung High-Speed Railway project was the cost overrun. In Tikoâs presentation during the working meeting with House of Representatives DPR Commission VI, it was shown that the cost overrun of Jakarta-Bandung High-Speed Railway was estimated to reach around US$ billion to US$ billion. âWe are currently having a discussion on the cost overrun. I think that it will not be provided in this yearâs [PMN], but next yearâs,â Tiko revealed previously. Then, he revealed that the third issue was the cash deficit. According to Tiko, discussions with China are still held to handle the negative operational cash flow, which will occur at the start of Jakarta-Bandung High-Speed Railwayâs operation. âWe are thinking of a scheme with financing from a bank, which is CDB China Development Bank,â Tiko said. Special Staff for SOE Minister, Arya Sinulingga, previously explained that another problem was the change of Jakarta-Bandung High-Speed Railwayâs route to Jakarta-Padalarang-Bandung. This is set in Presidential Regulation Number 93 of 2021. Previously, the route was set to be Jakarta-Walini-Bandung. âPrice changes can occur and are normal in a project. Moreover, in a project with a long route such as the Jakarta-Bandung High-Speed Railway project that spans 142 km. During construction, the design can change due to geological and geographical conditions that change from the original condition. Do not say that the original plan is wrong. Then, the price of lands can increase in time, which occurs during almost every construction,â he added.HighSpeed Rail Siemens Mobility Vectron Locomotives Velaro Suppliers Siemens Mobility A consortium made up of Siemens Mobility, Orascom Construction and The Arab Contractors has signed a contract with the Egyptian National Authority for Tunnels (NAT) to design, install and commission a 1,800 kilometre high-speed rail network in Egypt.
Categories Main category Heavy construction, nec 1629 Secondary categories N/A Key information Incorporation year Lorem ipsum dolor Trade name N/A Total employees Lorem ipsum dolor Directory name Lorem ipsum dolor Additional key information National ID N/A Administrator name Lorem ipsum dolor No. of employees at location Lorem ipsum dolor Legal status Lorem ipsum dolor Position Lorem ipsum dolor Business location type Lorem ipsum dolor Sales figures Revenue 70,920,000,000 IDR Modeled Report date Executives no executive available Contact information Phone number 021 806 7200 Fax N/A Website N/A Mobile N/A Email & Social media Email N/A Facebook N/A Twitter N/A LinkedIn N/A Corporate linkage No. of family members Lorem ipsum dolor consecteture adiciping Want to see more results ? Just sign up for FREE and unlock the number of results you can get access to. Free registration gives you also access to more details information on each company. Log In / Sign Up
TheSOEs are being led by PT Wijaya Karya Tbk to develop the high-speed rail project. The Indonesian consortium comprises PT Wijaya Karya, a construction company, railway operator PT Kereta Api Indonesia, toll-road builder PT Jasa Marga, and PT Perkebunan Nusantara VIII, a plantation company. Benefits of Jakarta to Bandung high-speed rail
Basic Information Name JakartaâBandung High-Speed RailwayLocation Jakarta to Bandung, West Java Province, IndonesiaType of Project TransportationProject Developers PT Kereta Cepat Indonesia China KCIC, a 60â40 joint venture between a consortium of Indonesian state-owned enterprises SOEs through PT Pilar Sinergi BUMN PSBI and a consortium of Chinese SOEs through Beijing Yawan HSR Co. Ltd. PSBI comprises PT Wijaya Karya, PT Perkebunan Nusantara VIII, PT Kereta Api Indonesia, and PT Jasa Yawan HSR comprises China Railway International Co. Ltd a subsidiary of China State Railway Group Co. Ltd, CR, China Railway Group Limited known as CREC, Sinohydro Corporation Limited a subsidiary of Power Construction Corporation of China, CRRC Corporation Limited CRRC, and China Railway Signal and Communication Corporation CRSC. Main Contractors High-Speed Railway Contractor Consortium HSRCC, a consortium between Indonesian company PT Wijaya Karya 30% and several Chinese companies 70%, including China Railway International Co. Ltd, CREC, Sinohydro Corporation Limited, China Railway Design Corporation another subsidiary of CR, CRRC Sifang Co. Ltd a subsidiary of CRRC, and Financiers China Development BankCost billion USD estimate as of 2021, from an initial estimate of billion USDProject Status Under construction Project Outline The idea of a fast train project in Indonesia dates back to 2011, when the Japanese International Cooperation Agency JICA together with the Indonesian Ministry of National Development Planning Bappenas carried out a feasibility study for a possible JakartaâSurabaya HSR, the first phase of which would connect Jakarta to Bandung. The JakartaâSurabaya mediumâhigh-speed railway was listed as a priority project in 2013. The original plan did not explicitly mention the JakartaâBandung HSR, but it suggested the JakartaâCirebon route via Bandung section would be prioritised in part due to its higher economic internal rate of return. However, when President Joko Widodo Jokowi came to power in 2014, he shelved the plan to build the railway and reallocated the budget to development projects outside Java. Much to the surprise of everyone, not least the Japanese, in March 2015, Jokowi asked both Japan and China to bid for the JakartaâBandung section of the railway. In September 2015, both countries presented their proposals, which were relatively balanced. The Japanese proposed five stations along a 140-kilometre track that is part of the JakartaâCirebon route, while the Chinese side planned eight stations along a 150-kilometre track. Though China had a higher interest rate of 2% compared with Japanâs China offered a longer maturity period for the loan 50 years as opposed to 40 years, a shorter time frame for completion of the project, and waived the state guarantee. After a fierce bidding war between China and Japan over the project, which China won, Indonesian Minister of State-Owned Enterprises Rini Soemarno was given a mandate to determine the fate of the railway, including the establishment of the joint-venture company to lead the project. In September 2015, a state-owned fast train consortium was formed, named PT Indonesia China Fast Train or Kereta Cepat Indonesia China, KCIC. KCIC is a consortium of Indonesian and Chinese SOEs. Indonesia is represented by PT Pilar Sinergi BUMN Indonesia PSBI, a consortium of four SOEsânamely, PT Wijaya Karya 38%, active in construction, PT Jasa Marga 12%, toll road builder, PT Kereta Api Indonesia 25%, railways, and PT Perkebunan Nusantara VIII 25%, plantations. Meanwhile, the Chinese side is represented by a consortium led by Beijing Yawan HSR Co. Ltd, which comprises China Railway International Co. Ltd, CREC, Sinohydro Corporation Limited a subsidiary of Power Construction Corporation of China, China Railway Design Corporation, CRRC Corporation Limited, and China Railway Signal & Communication Corporation. The initial deal included debt financing from the China Development Bank CDBâfor 75% of the total billion USD costâwhich was granted with a 10-year grace period and a 2% interest rate for the dollar-denominated loan. The remaining 25% of the projectâs cost will be funded by equity provided by KCIC. After the establishment of KCIC, the railway route was revised. The train was expected to reduce the 142-kilometre trip between Jakarta and Bandung from three hours to less than 40 minutes, with a maximum speed of 350 km/h. Four main stations are planned along the route Halim East Jakarta, Karawang West Java, Walini West Java, and Tegalluar West Java. Project Developer Project Contractor Soon after the establishment of KCIC, the ground-breaking ceremony for the JakartaâBandung HSR was held in Walini, West Java Province, in the presence of President Jokowi, on 21 January 2016. However, the project was already embroiled in controversy, with critics expressing concerns over the risk of default and the irregularities in the concession of the building permit. Then Transport Minister Ignasius Jonan did not attend the ceremony, and instead became one of the staunchest critics of the project. On 26 January, Jonan revealed that he had not issued the railway infrastructure operation permit as his ministry was still waiting for the required documents and negotiating basic terms for the concession agreement with KCIC. Despite the lack of permits and support from key ministries and lawmakers, in late January 2016, Jokowi issued a regulation containing a list of about 200 strategic projects including the HSR, signalling the strong backing of and attention from his office for this project. Many pundits believe that by backing the project, Jokowi was attempting to build his political legitimacy, with the project connecting the two largest metropolitan areas and located in the most populated province in Indonesia, cementing Jokowiâs claim to be the countryâs Infrastructure Fatherâ. From this point of view, Chinaâs initial commitment to complete the project before 2019 was critical to Jokowiâs government as it provided the president with political capital for his campaign for re-election that year. After several delays, including a stoppage owing to the COVID-19 pandemic, construction of the railway fell way behind schedule. As of December 2020, the project was said to be 64% complete. In April 2021, Indonesian media quoted senior management at KCIC as saying the project would be operational by the end of 2022. In May 2021, President Jokowi inspected the project during his visit to West Java Province and announced the project was 73% complete, with trial runs expected to commence at the end of 2022. Source Drawn by the author. Project Impacts Land The delay in loan disbursement was one of the main factors that impeded construction of the HSR from 2016 to 2018, due to inadequate preparation in the land acquisition According to local nongovernmental organisation NGO Indonesian Forum for the Environment Walhi, project construction has caused flooded roads, landslides, and damaged houses in part due to shoddy management and poor environmental protection procedures. As the planned route of the railway cuts through important water catchment areas, mountainous regions, and agricultural areas, the project has also impacted water supplies and caused environmental stress to the surrounding impact Due to poor preparation and multiple technical challenges, the project has incurred cost overruns. In 2017, the budget swelled from billion USD to billion USD. Economists and policymakers have questioned the viability of the project, worrying it will drag Indonesia into a debt trap. Employment and labour rights The project was expected to create 39,000 jobsâboth casual and permanentâduring its three-year construction phase, but no data are available to show whether this promise has been fulfilled. Meanwhile, for its operation, KCIC is set to offer 2,400 local jobs and the recruitment process was under way as of April 2021. The JakartaâBandung HSR has led to various concerns regarding the financial sustainability of the KCIC and Indonesian SOEs in general. With Indonesian finance accounting for a major share of total investment in the project 60%, economists and policymakers voiced concerns about whether the country was at high risk of falling into debt distress. This was especially so because the Indonesian SOEs joining the consortium are debt-heavy entities and, before the inception of KCIC, were already struggling to meet their repayment obligations. To develop these major projects, the SOEs are frontloaded with debt and will only get cash flow back years into the future, which is why delays are so costly. Some Members of Parliament called on the government to halt the project amid increased concerns that a bailout would be necessary should KCIC default on its debt. In particular, Prabowo Subianto, a challenger to Jokowiâs presidency during the 2019 general election, built his campaign on the claim that Indonesiaâs economic shortfalls were due to Chinese exploitation, and he even staged a protest against the HSR. As part of the campaign, Prabowoâs team promised to renegotiateâif not cancelâthe project, claiming that Indonesia must get a better dealâ, given that Chinese investment had eroded national interests. During the COVID-19 pandemic, pundits and the media regularly questioned the projectâs sustainability. In June 2020, the Jokowi government began discussions with Japan to join the project and suggested integrating the Chinese-built HSR with a separate Japanese-funded railway project linking Jakarta and Surabaya along a different route. Some in the Indonesian Government argued that only by integrating the two projects could they both become economically viable. However, integration would be difficult as the Japanese-built section uses a different railway gauge and speeds. The restructuring of KCIC management and the appointment of a new chief executive in March 2021 have been interpreted as clear signs of the worsening financial outlook for the company. Adding to this, the following month, Indonesian SOEs also suggested that China take up a larger stake in the project to bear the cost overrun. This remains unresolved and, according to the corporate secretary of KCIC, who was quoted by Reuters in April 2021 Until now, details regarding additional unexpected costs are still being discussed and negotiated at the shareholder level. Also, consultations between the Government of Indonesia and China are continuing.â According to an interview conducted by the author with one human resources manager, KCIC has employed a majority of local staff in the construction of the project, but top-level management is mostly dominated by Chinese expatriates, despite the fact the Indonesian side has a 60% share in the consortium. KCIC also claimed it has provided vocational training for domestic staff and local engineers to become the first HSR techniciansâ in Southeast Asia. While generating more than 2,400 job opportunities, the project has faced multiple problems and technical challenges in its construction phase. In April 2016, vendors tasked by KCIC to carry out land investigationsâincluding five Chinese nationalsâwere detained by the Indonesian Air Force for trespassing at the Halim Perdanakusuma Airport. In October 2019, a construction mishap caused Indonesiaâs state-owned Pertamina oil pipeline to erupt in flames. In January 2020, the breach of an embankment allegedly caused by KCIC led to flooding in the West Bandung Regency. In March 2020, flooding caused by improper landfill and waste dumping blocked the JakartaâCikampek toll road, which is one of the busiest routes in the greater Jakarta region. These incidents have sparked public suspicion about the quality of the projectâs technical assessment, given the environmental impact assessment AMDAL was completed in just seven days before the ground-breaking ceremony, according to NGO Walhi, which has been questioning the AMDAL submitted by KCIC since early 2016. Following the recent construction mishaps and environmental degradation caused by the project, Walhi staged a series of protests demanding the Indonesian Government and KCIC reassess the project, but they have been met with no response. The project continues without any further information being made public about plans to revisit the AMDAL or actions to minimise the risks. The land acquisition process has been no less problematic. Although KCIC secured a concession for the project in April 2016, progress was slow in the first two years. The inadequate preparation of land acquisition procedures and the involvement of ill-informed Chinese companies that overlooked the complexity of landownership in Indonesia have led to many controversies. There was a tendency on the part of the Chinese companies to assume public ownership of all land, as is the case in China. Moreover, the CDB made funding conditional on Indonesia securing all the land needed for the railway, making the delay even more challenging. Acquisition of land for the project finally reached 99% in late 2019, after the Indonesian Government intervened in the process. In-Depth Sources Belt and Road Podcast. 2021. Easy Money is Rarely Easy Jessica Liao on Infrastructure Financing and Export Credit Agencies.â Belt and Road Podcast, 21 January. Link. Camba, Alvin. 2020. Derailing development Chinaâs railway projects and financing coalitions in Indonesia, Malaysia, and the Philippines. GCI Working Paper 008. Global Development Policy Center, Boston University. Link. Friends of the Earth US. 2017. Investing in a Green Belt and Road? Assessing the Implementation of Chinaâs Green Credit Guidelines Abroad. Washington, DC Friends of the Earth US. Link in English; Link in Chinese. Liao, Jessica C. 2020. Easy Money and Political Opportunism How China and Japanâs High-Speed Rail Competition in Indonesia Drives Financially Risky Projects.â Panda Paw Dragon Claw, 21 December. Link. Liao, Jessica C. and Saori N. Katada. 2020. Geoeconomics, Easy Money, and Political Opportunism The Perils under China and Japanâs High-Speed Rail Competition.â Contemporary Politics 271 1â22. Lim, Guanie, Chen Li, and Emirza Adi Syailendra. 2021. Why Is It So Hard to Push Chinese Railway Projects in Southeast Asia? The Role of Domestic Politics in Malaysia and Indonesia.â World Development 138. Link. Salim, Wilmar and Siwage Dharma Negara. 2016. Why is the high speed rail project so important to Indonesia? ISEAS PerspectiveNo. 16. Singapore ISEASâYusof Ishak Institute. Link. Tritto, Angela. 2020. Contentious Embeddedness Chinese State Capital and the Belt and Road Initiative in Indonesia.â Made in China Journal 51 182â87. Featured Image Credits muhammadpascalfajrin CC, onjm4gW.
