Indonesia has launched the first Southeast Asian high-speed railway from Jakarta to Bandung. The inauguration of the railway on October 1st marks one of the first completions of many planned infrastructure projects backed by China as part of the controversial Belt-and-Road development initiative.
The train, affectionately nicknamed “Whoosh” by President Joko Widodo, was built by state-owned rail transportation firm PT Kereta Cepat Indonesia China (KCIC) in conjunction with China Railway International Company. This is part of a series of flagship infrastructure projects designed to modernize Indonesia’s transportation modes in an environmentally friendly manner. Anticipated to be operational by 2019, the joint infrastructure venture has been plagued by land procurement and pandemic-related setbacks since the start of construction in January 2016.
The project exceeded cost estimates by USD 2 billion and necessitated a USD 560 million loan from the China Development Bank. This has raised concern among officials wary of budget deficits for the upcoming fiscal year. According to Andry Satrio Nugroho, industry, trade, and investment researcher at Jakarta-based Institute for Development of Economics and Finance (INDEF), Chinese Development Bank loans and subsequent interest will take years to repay— presenting a significant obstacle to expenditure reductions necessary to reduce current deficit spending. Public trials of the railway began in the first week of the month with long-term ticket prices yet to be determined.
