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Asia Minute: Indonesia Cancels High Speed Rail Project, Frustrating China and Japan

Jeanette Burton / Pixabay Commons
Jeanette Burton / Pixabay Commons

The construction of Honolulu’s rail project is already having an impact on everything from traffic to local jobs.  In Asia, a rail project of roughly the same value was suddenly cancelled.  And that’s left potential contractors scrambling for what comes next.  HPR’s Bill Dorman has more in today’s Asia Minute.

It was going to be a 5-billion dollar project—a high-speed rail linking Jakarta to Bandung on Indonesia’s island of Java.  Chinese and Japanese companies competed fiercely on proposals, and governments got involved—sending high-level envoys to negotiate last-minute deals.

But in the end, Indonesian President Joko Widodo cancelled the entire project—because it was too expensive.  He decided that 93-mile route between the two cities didn’t really need a bullet train after all.  Indonesia’s coordinating minister for the economy told reporters “a medium-speed railway is enough.”  That also should be thirty to forty percent cheaper than the high speed option.

The Jakarta Post reported envoys from China and Japan “could not hide their displeasure” at the decision.  This week, the Indonesian government announced it is setting up a consortium of local state-owned enterprises to work on the new project, with a target of starting construction by the end of the year.  This work will also be open to foreign bids - and while analysts say it may attract attention from Japanese and Chinese companies, it’s not likely to draw that same level of government interest, and certainly is NOT the same price as the high-speed rail would have been.

Bill Dorman has been the news director at Hawaiʻi Public Radio since 2011.
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