Indonesia to Renegotiate Financing for High-Speed Rail Project

Indonesia will ask China to finance most of the swelling costs for the Jakarta-Bandung high-speed rail project. PT Kereta Cepat Indonesia China (KCIC) President Director Dwiyana Slamet Riyadi said his company is negotiating with the China Development Bank to finance 75 percent of the US$2 billion in cost overrun.

Dwiyana said the Indonesian government has proposed that the same financing structure applies to cost overruns. Later, the consortium working on the high-speed rail project will bear 25 percent of the cost, while the rest will be funded from China’s loan. The cost of the Jakarta-Bandung high-speed rail project, which is targeted for completion in 2023, has swelled from US$5 billion to nearly US$8 billion. "The first to be offered is the China Development Bank, a lender that finances 75 percent of the project," Dwiyana said.