Caixin
Sep 06, 2016 07:33 PM
BUSINESS & TECH

China Railway Corp.-led consortium awarded Indonesian project

(Beijing) — China's homegrown bullet trains will be used in a 142-km high-speed railway project in Indonesia, the latest move by the Chinese government to export its state-of-the-art rail technology.

Sheng Guangzu, general manager of China Railway Corp. (CRC), the country's railway operator, said on Sept. 3 that China-made bullet trains will run on a high-speed rail line connecting Indonesia's capital, Jakarta, and the country's third-largest city, Bandung.

China's efforts to push its high-speed technology have suffered a string of setbacks in recent years. Several overseas bids by Chinese rail companies in countries, including the U.S. and Mexico, have been scrapped, mainly due to red tape.

The Jakarta-Bandung link has also seen several proposal changes before it was finally awarded to a Chinese consortium led by CRC.

When the Southeast Asian nation floated a plan to build the country's first bullet train line late last year, both China and Japan expressed interest in the project.

But the Indonesian government scrapped bids from both sides in September, saying it wanted a rail link on which trains run at less than 250 km per hour. Then, in an unexpected reversal, Indonesia chose China's bid over Japan's in October to build a link whose trains could run at speeds of up to 300 km per hour, a decision made possible due to the flexible funding options included in the Chinese bid.

To secure the deal, the consortium had a groundbreaking ceremony in January, even before the Indonesian authorities granted a construction license to the group. The license was later granted in August, after the group spent seven months negotiating with local governments "one by one" for permission to expropriate land, a person close to the Chinese bidders told Caixin. 

The trains for the Jakarta-Bandung project will be assembled in Indonesia, and an assembly plant is being built, Sheng said.

China's first homegrown bullet train, built according to a technology standard developed and patented in the country, completed its inaugural trip in mid-August and it will get a production permit from the National Railway Administration next year at the latest, a person close to CRC said.

Contact reporter Na Chen (nachen@caixin.com); editor Ken Howe (kennethhowe@caixin.com)

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