Firms behind Indonesia’s high-speed rail seek another US$1 billion loan from China

Firms behind Indonesia's high-speed rail seek another US$1 billion loan from China

JAKARTA: The consortium building a China-funded high-speed railway in Indonesia is seeking a 16.1 trillion rupiah (US$1.03 billion) loan top-up from China Development Bank (CDB) to fund a budget overrun on the project, company executives said on Wednesday (Nov 9).

The US$6 billion project is facing ballooning costs due to several issues including higher land procurement costs, delays in construction due to the pandemic, and rising prices of materials, Dwiyana Slamet Riyadi, president director of the consortium, known as KCIC, told a parliamentary hearing.

The total increase in costs is estimated at US$1.45 billion and China’s National Development and Reform Commission has agreed 75 per cent of this should be funded by bank loan, Didiek Hartantyo, president director of state-owned railway firm PT KAI, one of the companies in the consortium told the same hearing.

The rest of the cost will be funded by an increase in stakeholder capital, Didiek said.

KAI is in the process of requesting parliamentary approval for a 3.22 trillion rupiah capital injection from the state, while China Railway Engineering Corporation and other Chinese state companies are expected to up their stake by 2.15 trillion rupiah, Didiek said.

Leave a Reply

Your email address will not be published. Required fields are marked *