Clarifying Misconceptions on The Jakarta-Bandung High-Speed Railway

By Xu Liping

S ome foreign media institutions have errantly characterized the Jakarta-Bandung High-Speed Railway (Jakarta-Bandung HSR) as a potential debt trap, claiming that the railway project could cause heavy debt burden for Indonesia. This is the biggest misunderstanding and misinterpretation of the project.

First, the Jakarta-Bandung HSR is essentially a commercial project jointly built and run by the state-owned enterprises of both China and Indonesia.No bullying was involved; financing was determined through joint consultation and proceeded in accordance with market principles. Any budget increase for the project was also discussed and decided by China-Indonesia joint ventures, which has no relation to sovereignty and other political issues.

Second, profit calculation for the Jakarta-Bandung HSR should not simply follow standards from Western countries such as the volume of passengers and goods. High-speed railways and other large infrastructure projects cannot be evaluated according to such simple dimensions. After starting operation, the Jakarta-Bandung HSR will bring comprehensive benefits to the local economy because it could boost industrial economic growth and foster an industrial and economic belt by attracting industrial clusters such as textile and automobile enterprises.The railway could also increase logistic profits in the industrial and economic belt and promote investment in businesses along the route.

Furthermore, the population along the Jakarta-Bandung HSR is expected to increase from 40 million to 70 million by 2045. The railway will accelerate population mobility in the region and increase ridership of high-speed trains.Satellite cities emerging along the railway will help to relieve population pressure on Jakarta while facilitating development of multiple sectors including real estate and tourism.

Third, the Jakarta-Bandung HSR will foster improvement of wider transportation in the two cities and boost economic growth, the benefits of which are difficult to measure by calculating investment returns. Tonny Agus Setiono, Head of Sub-Directorate Urban Transport of the Directorate of Land Transportation, Ministry of Transportation of Indonesia, claimed that Jakarta’s economic losses due to traffic congestion totaled 65 billion Indonesian rupiah (US$ 4.23 million)last year. On August 28, the first light rail transit serving Jakarta opened, but its length is only 41.2 kilometers. The Jakarta-Bandung HSR will promote construction of urban transportation infrastructure in Jakarta and Bandung,helping the local governments extend the length and increase the number of light rails, enhance the construction of subway lines, and build more roads and bridges connecting various transportation facilities. The great upgrade in urban transportation will undoubtedly improve the quality of life for people in both cities.

After construction began in January 2016, the Jakarta-Bandung HSR underwent long and complex development before it officially opens to traffic in 2023. Despite various challenges including financing, land acquisition, and technology transfer,China stayed committed to working with Indonesia to tackle each problem, and construction of Indonesia’s first highspeed railway was ultimately completed.The significance of the project and the efforts of both sides have transcended the economic benefits, making the railway a model for cooperation and joint development among developing countries.

Economic returns for big infrastructure projects never happen overnight. Relevant parties are proceeding with strong determination and stamina thanks in large part to strong governmental support.

Building infrastructure has been the focus of Joko Widodo’s administration over the past nine years, which demonstrates his strategic vision.International investment banks are optimistic about Indonesia’s development prospects. The country is expected to join the ranks of the world’s five largest economies by 2045. Those demonizing the Jakarta-Bandung HSR as a “debt trap” are underestimating Indonesia’s ambitions and leaning towards the wrong side of history.