A $5.5 billion Chinese-led railway line in Indonesia has hit early snags amid domestic opposition to the project touted by President Joko Widodo as a key plank of his infrastructure ambitions. The president attended a groundbreaking ceremony last month for the high-speed line between Jakarta and Bandung. However, the company building the link hasn’t been granted a business permit or provided documents needed to be given the go-ahead, the Jakarta Post reported Jan. 26. Indonesian State-Owned Enterprises Minister Rini Soemarno declined to comment on the permit situation on Monday.
The 150-kilometer link is among 20 planned or ongoing railway projects across Indonesia, whose network has been largely untouched since Dutch colonial days. The president, better known as Jokowi, is trying to revive lackluster growth in Southeast Asia’s largest economy by boosting infrastructure spending.
“They are rushing to get started without the permits and Jokowi will be under pressure to take over in case it fails,” Yoga Adiwinarto, Indonesia director of the Institute for Transportation and Development Policy, said by phone Monday. “This makes me wonder how sustainable the project will be.“
PT Kereta Cepat Indonesia Cina, the company building the line, is seeking a regulatory guarantee to ensure that there will be discussions for a longer concession period if there’s a need to change the train routes or tracks, Soemarno told reporters in Jakarta Monday. The company isn’t seeking a financial guarantee for the project to proceed, she said.