Home Asian News China's infrastructure projects in Indonesia face complete delay - The Diplomat

China’s infrastructure projects in Indonesia face complete delay – The Diplomat


On March 23, the Indonesian news magazine Tempo report that the Jakarta-Bandung High Speed ​​Rail project, one of China’s main Belt and Road Initiative (BRI) projects in the country, has been delayed due to financial and environmental considerations. .

This is not the first time the project has crashed and delayed. Last year it was report that the project was suspended because the Indonesian Ministry of Public Works and Housing argued that the construction of the project was disrupting traffic flow along the Jakarta-Cikampek toll road, the Purwakarta-Bandung-Cileunyi toll road ( Purbaleunyi) and other non-toll roads in the vicinity of the railway line.

The pile of construction materials on the shoulder of the road is believed to have disturbed the drainage system around the project area. Joint venture PT Kereta Cepat Indonesia China (KCIC) – between an Indonesian group of State-owned Enterprises (BUMN) through PT Pilar Sinergi BUMN Indonesia (PSBI) and Beijing Yawan HSR Co., Ltd, a group of companies Chinese railway – is also slow construction of the drainage system for the project. As a result, floods swept through the tollbooths in early January. Similar incidents repeated in late February, creating traffic jams.

The $ 6 billion high-speed rail project has also undergone a series of delays, most recently due to the COVID-19 pandemic. Similar delays have affected important BRI projects in other countries, including Pakistan and Sri Lanka.

Chinese Vice Foreign Minister Ma Zhaoxu Discuss last year that “the impact of the outbreak on BRI development was temporary” and Beijing remained “ready to work with all parties to continue to promote high-quality BRI development. We fully believe in this “.

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In practice, however, many Chinese projects were delayed long before the COVID-19 pandemic. Similarly, the persistent delay in the completion of China’s railway project is a reminder to Indonesia to take additional measures to address potential problems before signing infrastructure projects. Large-scale BRI.

The implementation of BRI projects in Indonesia began with the establishment of a comprehensive strategic partnership between the two countries in 2013. President Susilo Bambang Yudhoyono, said, “We have once again made the calendar. by agreeing to build a comprehensive strategic partnership. I believe that under the leadership of President Xi Jinping, we will be able to improve our bilateral cooperation in the future. That same year, Xi announced the founding of the Maritime Silk Road, the BRI’s maritime route, in a speech to the Indonesian parliament.

The agreement gave birth to a number of major projects, such as the Jakarta-Bandung High Speed ​​Rail project, the Morowali Industrial Park, the Probolinggo-Banyuwangi Expressway and the Weda Bay Industrial Park.

Many of these projects have caused controversy within Indonesia, including the railway project.

For example, when the deal was signed in 2016, Faisal Basri, an economist at the University of Indonesia, be censured Decision approving the construction of railway project of the Government even though this project is implemented without using state capital. There have also been allegations of corruption associated with the project. According to Basri, “We all know that there are many ‘underdog’ cooperation with China. Don’t expect to be clean if you’re still cooperating with China. ”

A year earlier, former Indonesian Minister of Economy Emil Salim questioned the project’s economic prudence. Salim stated that Indonesia’s main “concern in US dollars is melt down, so we must encourage government projects not to push US dollars out. This means no developer should eat a lot of dollars. Like high-speed trains, half of the investment is in dollars, so you have to buy dollars to build a fast train ”.

Despite the criticism, the government is determined to continue the project. But pessimistic predictions came true when the project was halted in early 2020 for 14 days due to some of the environmental problems it caused to the surrounding areas. State Enterprise Minister Erick Tohir explain that he asked China to “thoroughly evaluate all deficiencies in project management, especially those that harm the environment and society for the community.”

Although it was eventually resumed, the project ran into trouble. Scheduled to commence operations in early 2021, the project is currently believed to exceed $ 1.39 billion in budget, largely due to land acquisition challenges and building breakdowns. One example is the fire of a fuel distribution pipeline by PT Pertamina (Persero) in the city of Cimahi, West Java, in October 2019, caused by a collision with a railway construction, causing a work stoppage. prolongation. Another factor is the change in price during the project’s work. Source cited by Tempo to speak that during the evaluation of all aspects of the project, an excess was found, up to 23% of the originally envisaged cost.

The project’s challenges should be a warning to the Indonesian government to be careful in plunging into large-scale infrastructure development with the Chinese government – or any other outside force.

The schedule of a number of other Chinese projects in Indonesia has also been multi-generation, including the construction of the Batangtoru 3 Hydropower Plant in North Sumatra, a project under construction by China’s Sinohydro Co., Ltd., which is temporary suspended in June last year due to manpower issue. The company in charge was still unable to bring in Chinese workers due to Indonesia’s COVID-19 restrictions. The completion of the $ 1.5 billion dam is now available push back from 2022 to 2025.

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Immediately, the Jakarta government should sit back and discuss with Chinese counterparts the next steps needed to revive these delayed projects. The two countries should find ways to jointly resolve these situations in a way that benefits both sides. In the long term, Indonesia needs to ensure that appropriate feasibility studies are done before signing any agreement and address the various real, financial and environmental impacts they have.

The Jokowi administration should remember that Indonesia has a significant bargaining power with China. While Indonesia may need Chinese investments to boost its economy, China needs Indonesia to achieve economic and strategic goals abroad. The BRI’s planned maritime route from China to Rotterdam would not have been possible without the participation of Indonesia – a fact that Jakarta should make the most of its advantages.

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