Jakarta-Surabaya transportation: Considering potential investors for the high-speed railway
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Transportasi Jakarta-Surabaya: Menimbang opsi investor kereta cepat dari Jakarta ke Surabaya
25 July 2024
By Akbar Evandio and Rio Sandy Pratama
Although a pre-feasibility study has been conducted with a Chinese company, the Jakarta-Surabaya high-speed railway project is not guaranteed to be awarded to the Chinese investor. A Japanese company still has a strong chance to participate in the project.
This was revealed during a meeting among President Joko Widodo, the State-owned Enterprises Ministry, PT Kereta Cepat Indonesia China, and PT Kereta Api Indonesia at the Presidential Palace in Jakarta on Wednesday (24/7).
Kereta Cepat Indonesia China (KCIC) President Director Dwiyana Slamet Riyadi admits that his company has reported the development progress of the Jakarta-Surabaya high-speed railway project to President Joko Widodo.
He mentioned that one of his discussions with the President covered the pre-feasibility study conducted by the Chinese company.
”It is being discussed with China,” he said after meeting with President Joko Widodo, State-owned Enterprises Minister Kartika Wirjoatmodjo, and PT Kereta Api Indonesia (KAI) President Director Didiek Hartantyo at the Presidential Palace on Wednesday (24/7).
He stated that KCIC has reported to the President about the project's progress and the support needed from the government.
“For instance, an access road. Future cooperation with China might take a different form. Please evaluate the current performance, as China has more experience in operational safety,” he stated.
However, Dwiyana mentioned that there was currently no estimate for the value of the Jakarta-Surabaya high-speed railway project.
Moreover, he added that his company has yet to decide whether to cooperate with the company from China or Japan.
“It has yet to be decided as it is still in the pre-feasibility study period. This is a joint project as there are many parties, such as the Centre for Testing, measurement, Training, Observation, and Engineering Services (POLAR) of Universitas Indonesia,”
Meanwhile, State-owned Enterprises Deputy Minister Kartika Wirjoatmodjo said that the feasibility study for the Jakarta-Surabaya high-speed railway project was still under discussion.
“It is currently being discussed,” he said after the meeting.
He explained that the project was currently being discussed with the company from China.
“It is being discussed with China,” Kartika said.
According to Bisnis, Transportation Minister Budi Karya Sumadi stated that the Jakarta-Surabaya high-speed railway project would be proposed as a national strategic project (PSN) after its feasibility study.
Budi Karya revealed that the plan to extend the route of the Jakarta-Surabaya high-speed railway was still being studied.
He said that PT KCIC has proposed to extend the route of the high-speed railway.
He added that the Transportation Ministry would conduct a thorough study on the proposed route. Additionally, Budi revealed that his agency would also examine the project's feasibility and funding potential.
However, Budi Karya did not explain in detail when the study would be completed. “It is currently being studied. We will collaboratively asses the route and funding options,” he said in late May.
He stated that the Jakarta-Surabaya high-speed railway has the potential to be proposed as a PSN once it is realised, given the project's massive scale.
“When it is completed, it will be proposed to be included as a PSN,” he stated.
Previously, Transportation Ministry Spokesperson Adita Irawati ensured that the pre-feasibility process for the Jakarta-Surabaya high-speed railway would not be completed in 2024.
She added that the study process would continue after President-elect Prabowo Subianto takes office in October 2024. “I assure you that it will not be completed this year,” she said.
Adita mentioned that the study process to extend the high-speed railway to Surabaya was based on the evaluation of the Jakarta-Bandung high-speed railway, Whoosh.
She said that the project’s study would go through several extensive stages.
Passenger target
In addition to the Jakarta-Surabaya high-speed railway project, Kartika mentioned that the meeting with President Joko Widodo also covered the performance report of KAI, Whoosh, and the Light Rail Transit (LRT).
“Yes, we have updated the President on the performance of KAI, the high-speed railway, and the LRT,” he added.
Kartika emphasised that at the start of Whoosh’s operation, its average daily passenger volume was 9,000 passengers per day.
However, he added that Whoosh’s current passenger volume has increased to around 24,000 passengers per day.
Regarding the LRT’s traffic, Kartika noted that it has also experienced a positive trend, now serving 80,000 passengers per day.
“We plan to increase the number of operating trains. The high-speed railway currently has 48 units, which will be increased to 62. Meanwhile, the LRT's units will be increased from 20 to 27. This will allow us to increase the frequency of the service. As a result, we also expect a rise in the number of passengers.,” he explained.
He stated that the government was targeting Whoosh to reach a daily passenger count of 29,000. He added that this goal could be achieved within the next 2-3 years.
“The current numbers are slightly below the target, but we are working towards it. We believe we can achieve it within 2 years. The initial target is 29,000 passengers per day, and with 24,000 per day currently, we are quite close. We aim to reach this target within 2-3 years,” Kartika explained.
During the occasion, he also responded to statements from the management of PT Wijaya Karya (Persero) Tbk (WIKA), who attributed the company's increased losses in 2023 to the Whoosh project.
Kartika said that the claim was a matter between KCIC and WIKA.
“This is when they were the contractor,” he added.
Meanwhile, Dwiyana emphasised that the claim must be clarified with the relevant parties.
However, Dwiyana emphasised that KCIC would continue to make payments in accordance with the applicable engineering, procurement, and construction (EPC) contract.
“Please direct your questions to WIKA, as they acted as the contractor. This means all invoices from the contractor must comply with the clauses in the EPC contract. Good corporate governance must be implemented by all parties,” he explained.
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