China and Japan vie for choice high-speed rail job in Indonesia

Uneasy neighbours China and Japan have managed to stay out of each other’s way during China’s dramatic emergence onto the world economic scene, but now the two have gone head-to-head over a business deal in Indonesia that is dear to each rival’s heart: high-speed rail. 

Yesterday Indonesia’s top planning minister said the government is studying bids from both China and Japan to finance and build a fast railway between the capital, Jakarta, and the sprawling West Javan city of Bandung, around 123km away. 

That line would be part of Indonesia’s planned 750­km high-speed rail network that would cut across four provinces on the main island of Java and end in the country’s second largest city of Surabaya. 

Indonesia’s president Joko Widodo has said he wants to improve Indonesia’s infrastructure to develop the economy and create thousands of new jobs. 

The planning minister, Andrinof Chaniago, told reporters yesterday that a decision on which proposal to accept could be made in about two weeks, the AP news agency reported. 

Each contender has impressive credentials. 

Japan is famous for its Shinkansen bullet trains, and has been developing its network since 1964. 

China is a late­comer to the party, but has built high-speed rail like nobody else. 

It launched its first high-speed rail service only in 2007, but now claims to have 16,000km of high-speed railways in operation, the world’s largest high­speed network. 

According to AP, each country has lobbied intensely to secure the deal but, in the end, it may come down to money. 

Chaniago said China estimates the line would cost $5.5bn and is offering Indonesia 50­ year loans that will charge annual interest of 2%, AP reported. 

Japan is offering loans of $4.4bn with a 40­ year repayment period and an annual interest rate of less than one percent, according to Indonesian government officials, said AP. 

Other perks are on the table, too. China’s embassy in Jakarta this week released a statement promising 40,000 new jobs in Indonesia for every year of the line’s construction. 

Photograph: On your marks: A selection of Japanese Shinkansen trains line up for public view at  the 30th anniversary of the Jōetsu Shinkansen at Niigata Shinkansen Rolling Stock Center, Japan (Rsa/Wikimedia Commons)