Indonesian companies ask China to up stake in high-speed rail projectBy Reuters Staff
APRIL 15, 20213:41 AM
https://www.reuters.com/article/indonesia-railway-idUSL4N2M80V7JAKARTA, April 15 (Reuters) - Indonesian state companies building a Chinese-funded high-speed rail line are negotiating for Beijing to increase its stake in the project after budget overruns look set to boost costs by a fifth, a company executive said.
The 142 km (88 miles) rail project, connecting the capital Jakarta to Bandung, which is part of China’s Belt and Road Initiative, was originally expected to cost 66.76 trillion rupiah ($4.57 billion) when awarded to a consortium of Chinese and Indonesian state firms in 2015.
Construction company Wijaya Karya has the biggest share in a 60% stake it co-owns with other Indonesian firms in the consortium, named PT KCIC. The China Railway Engineering Corporation and other Chinese companies control the rest.
Wijaya Karya President Director Agung Budi Waskito expected costs to rise by 20% to finish construction, due between the end of next year to early 2023, and said that companies were in talks with Chinese counterparts to reduce their 60% stake.
“We hope Indonesia has a smaller portion than what it is now so the cost overrun can be borne by the (Chinese) government,” Agung told an online seminar on Wednesday.
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Mirza Soraya, corporate secretary of KCIC, said that unexpected expenses particularly related to land clearing and dealing with utilities like water or power boosted costs.
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