China, Ja­pan vie to build 1st In­done­sia bullet train

The China Post - - WORLD BUSINESS -

Main­land China and Ja­pan are locked in an in­creas­ingly heated con­test to build In­done­sia’s first high-speed rail­way, with the Asian giants sweet­en­ing deals and turn­ing up the charm as time runs out to woo Jakarta.

The ri­valry over this ma­jor pro­ject is just the latest to flare up as China chal­lenges Ja­pan’s long-stand­ing dom­i­nance in South­east Asia as a key source of in­fra­struc­ture fund­ing.

Ja­pan, a top-three in­vestor in In­done­sia with huge stakes in the automotive and min­ing sec­tors, seemed des­tined to build the high-speed rail­way un­til main­land China mus­cled in with a counter of­fer ear­lier this year.

Pres­i­dent Joko Wi­dodo stoked the com­pet­i­tive spirit of the two Asian pow­er­houses as he toured China and Ja­pan in April try­ing to drum up much-needed in­vest­ment for a multi-bil­lion-U.S.-dol­lar over­haul of In­done­sia’s ag­ing in­fra­struc­ture.

In both Bei­jing and Tokyo, he boarded bullet trains and de­clared his vi­sion for high-speed rail in In­done­sia: a line con­nect­ing the sprawl­ing cap­i­tal Jakarta with Ban­dung, a moun­tain-fringed city famed for its univer­si­ties and IT ex­per­tise about 160 kilo­me­ters (100 miles) away.

If it was a stunt to grab the at­ten­tion of his hosts, it cer­tainly worked. A steady stream of diplo­mats and en­voys from Tokyo and Bei­jing have been pour­ing in since April to pitch the Wi­dodo ad­min­is­tra­tion, and Jakarta is en­joy­ing the lime­light.

“Let them race to in­vest in In­done­sia. It’s good for us,” Luhut Pan­jai­tan, chief po­lit­i­cal min­is­ter and a close aide to Wi­dodo, told AFP.

“It’s like a girl wanted by many guys, the girl then can pick who­ever she likes.”

The line, if com­pleted, will not only slash travel time be­tween Jakarta and Ban­dung but pave the way for an ex­panded net­work link­ing the cap­i­tal with In­done­sia’s sec­ond­largest city Surabaya in East Java.

The schmooz­ing has been ratch­et­ing up ahead of Aug. 31, when Wi­dodo is ex­pected to an­nounce the suc­cess­ful bid­der.

China is not seek­ing any fund­ing guar­an­tees from the In­done­sian gov­ern­ment and has promised con­struc­tion would be­gin this year, with the net­work up and run­ning no later than 2019.

Bei­jing re­cently show­cased its high-speed rail prow­ess in an ex­hi­bi­tion at a plush Jakarta mall, where main­land China’s rep­re­sen­ta­tive to In­done­sia likened the pro­ject to a child reared by Jakarta and Bei­jing.

“Our num­ber one pri­or­ity is to en­sure the baby’s health and growth, rather than to rush him to make money to sup­port the fam­ily,” Xie Feng said, play­ing down sug­ges­tions main­land China’s main mo­tive in this pro­ject was profit.

Ja­pan’s pro­posal is slightly more ex­pen­sive than its ri­val, and it is only promis­ing trains will hit the tracks in 2021. On the plus side, it has of­fered a lower in­ter­est rate of 0.1 per­cent, a frac­tion of the 2.0 per­cent China has put for­ward.

Ja­pan also has history on its side. The coun­try is fa­mous for its leg­endary shinkansen, its im­pres­sive high-speed net­work that for decades has whizzed com­muters be­tween cities at great speed with­out a sin­gle fa­tal ac­ci­dent on the rails.

China has coun­tered this by ar­gu­ing it has built 17,000 kilo­me­ters of high-speed rail­way — or 55 per­cent of the world to­tal — in the 12 years since it be­gan con­struct­ing bullet trains.

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