Indonesia and China have agreed on a $1.2 billion budget for the Southeast Asian country’s first high-speed train project, an Indonesian government official told parliament on Monday.
According to the consortium of Indonesian and Chinese state companies building the railway, known as PT KCIC, the project was estimated to be $2 billion over budget, with a total cost of 113 trillion rupiah ($7.36 billion) reached.
“We agreed on a cost-plus figure of $1.2 billion. There are a lot of things that they’re still looking at in terms of taxes, frequency clearing fees, but we’ve agreed on the numbers, Karthika Virjavatmoju, Deputy Minister of State Owned Enterprises said.
He added that further details, including an additional loan from the China Development Bank to meet the additional costs, would be finalized within a month.
The companies in the consortium were expected to increase their equity participation, while Indonesia’s state-owned railway firm PT KAI, which controls 60% of KCIC along with state-owned construction company Vijaya Kriya, raised 3.2 trillion rupiah ($210.66 million) received capital injection. The government helped complete the project last month.
The 142-kilometer line, which will connect the capital Jakarta to Bandung, the country’s largest city, was awarded to KCIC in 2015 but has faced several problems, including construction delays due to the pandemic.
The project is expected to be completed in June 2023.
($1 = INR 15,190.0000)