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Indonesia to award train contract to China

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Indonesia will award a hotly contested, multi-billion-dollar railway project to China, a Japanese embassy official said on Tuesday, citing remarks by an Indonesian minister.

[JAKARTA] Indonesia will award a hotly contested, multi-billion-dollar railway project to China, a Japanese embassy official said on Tuesday, citing remarks by an Indonesian minister.

The two Asian giants had been vying for the project to build a rail line linking the Indonesian capital, Jakarta, with the textile hub of Bandung.

Indonesia initially envisaged a high-speed service on the 150 km journey but this month, it changed the plan, opting instead for a medium-speed train.

Analysts have said whoever won the bid could be a front runner for future rail projects in the region, including one linking Kuala Lumpur and Singapore. "Minister Sofyan Djalil informed our chief cabinet secretary that Indonesia welcomes the Chinese proposal and we see this as the final decision of the Indonesian government," Yoshiko Kijima, the economic affairs attache at the Japanese embassy in Jakarta, told Reuters.

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Mr Djalil was on a special visit to Japan this week, presidential chief of staff Teten Masduki told reporters. "There are many infrastructure projects, not just trains, and many opportunities for the Japanese government to build infrastructure in Indonesia," Mr Masduki said when asked what Mr Djalil would convey to Japan.

Indonesia's minister responsible for state-owned enterprises, Rini Soemarno, has said China's proposal for the project was less financially burdensome for Indonesia because it did not require a government guarantee or use the state budget.

Soemarno is expected to officially announce the winner in coming days.

REUTERS

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