The governments of China and India have agreed to a budget increase of $1.2bn to complete the China-financed high-speed railway running between the Indonesian capital Jakarta and its third largest metropolis, Bandung in West Java.
Deputy Minister of State-Owned Enterprises, Kartika Wirjoatmodjo, told parliament on Monday: “We agreed on the cost overrun figure of $1.2 billion. There are several items that they are still reviewing regarding taxes, frequency clearing fees, but we have agreed on the numbers,” Reuters reports.
The railway is expected to start operating from June this year.
In October last year, a further $2bn was added to the scheme’s cost, making it £7.36bn, according to Reuters. This latest overrun would push the price tag to $8.56bn.
A consortium of Indonesian and Chinese state companies known as PT KCIC is building the railway part funded by a loan from the China Development Bank.
The minister said an additional loan from the bank to cover the extra costs would be finalised within a month.
Last Friday, 10 February, PT KCIC said it had taken delivery of 32 trainsets manufactured by Chinese state-owned CRRC Corporation.
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