Whoosh, China Reminds You Not to Be Fast on the "Sequel" to the High-Speed ​​Train

The President visited China to negotiate the continuation of cooperation in building the high-speed train to Surabaya.

The following article was translated using both Microsoft Azure Open AI and Google Translation AI. The original article can be found in Whoosh, China Ingatkan Jangan Asal Cepat di ”Sekuel” Kereta Cepat

^{The atmosphere of the departure platform Whoosh or Jakarta-Bandung Fast Train at Tegalluar Station, West Java, Monday (25/9/ 2023).}

Learning from the experience of building the Jakarta-Bandung high-speed train, the government is reminded not to rush the feasibility study for developing the "sequel" route of Whoosh to Surabaya. China took one year to evaluate. Even though only the trains run fast, the feasibility study still has to be accurate.

Indonesia's long-awaited dream of having a high-speed train that can rival Japan's Shinkansen has finally come true. Starting this week on Wednesday (18/10/2023), the public can already ride Whoosh, the Jakarta-Bandung high-speed train, by purchasing a promo ticket for only Rp 300,000 per route. Please note that the words PBB, PKS, and PPP are not to be translated.

Without delay, the government is preparing to extend the Whoosh route to Surabaya through the southern part of Java. Cooperation with China through the Belt and Road Initiative (BRI) is once again being considered. Coincidentally, this week the BRI High-Level Conference is being held in Beijing, China.

Also Read: Inaugurating Whoosh Train, President Not Targeting Profits and Losses

President Joko Widodo is scheduled to attend the BRI Summit and negotiate the continuation of the cooperation in the development of high-speed trains between the two countries. According to the plan, Indonesia will lobby the Chinese Government to be willing to improve the structure of the cooperation and offer more affordable loan interest rates to work on the sequel project of Whoosh.

Director of the Institute of International Affairs of Renmin University of China, Wang Yiwei, who serves as an advisory panel member for the Chinese Ministry of Foreign Affairs, believes that Indonesia needs to gradually carry out the development plan for the high-speed train project, Whoosh.

KOMPAS/ATIEK ISHLAHIYAH AL HAMASY

The public has the opportunity to try out the Jakarta-Bandung fast train, Thursday (21/9/2023).

"This is only the beginning of Whoosh. In two days (Wednesday) there will be a premiere ticket sale. Let's see how it goes first. An important lesson we learned from the experience of reforming and opening up to the world is that reform must be done gradually," he said at a press conference of the Public Diplomacy Advisory Panel of Foreign Affairs of China in Jakarta on Monday (16/10/2023)."

According to him, the Chinese government will first evaluate the operation of the Jakarta-Bandung High-Speed Railway for the next year, before discussing the potential continuation of the development project to Surabaya.

If support from China is always considered a debt trap, this is actually an insult to developing countries.

Since PT Kereta Cepat Indonesia China (KCIC) which is overseeing the fast train project is a joint venture between Indonesian state-owned enterprises (BUMN) and Chinese BUMN, future planning to develop Whoosh will continue discussed together.

"This project is, right, a joint venture. 60 percent of the ownership is your BUMN, 40 percent is Chinese BUMN. "So, at all stages, China will definitely continue to consult with Indonesia regarding steps to develop this project," he said.

In accordance with market mechanisms

After the Whoosh project was completed with cost increases of up to 20 percent above the initial estimate and high loan interest, there were concerns that Indonesia would fall into China's debt trap. Moreover, the project ended up still carrying the State Revenue and Expenditure Budget (APBN) as collateral for the project debt.

Then, will the financing scheme for the Jakarta-Surabaya high-speed train be more "friendly" in the future? Wang Yi refused to answer in detail. However, he stated that BRI's business-to-business scheme is always based on market mechanisms.

Also Read: China Promises More Open Belt and Road Initiative

"So, whether loan interest can be lower or not, that's just part of the financial analysis in the market. Let business be business. The most important thing now is let's test drive what the next year will look like, then we'll see what the future will be like," he said.

He rejects the frequent assumption that China traps developing countries in debt through the BRI scheme. According to him, loans from China are used for productive purposes so that developing countries will eventually reap the benefits, although it may take quite some time.

MACHRADIN WAHYUDI RITONGA

Passengers of the Whoosh high-speed train are getting ready to board the train at the Padalarang High-Speed Train Station in the West Bandung Regency, West Java, on Wednesday (4/10/2023).

"All BRI projects go through in-depth negotiations between the Chinese government and developing country governments. Nobody forces it. If support from China is always considered a debt trap, this is actually an insult to developing countries. Are hundreds of countries (BRI recipients) so stupid that they want to fall into China's trap?" Wang Yi said.

Previously, the Jakarta-Bandung high-speed train construction project ballooned (cost overrun) by 1.2 billion US dollars or Rp. 17.8 trillion from the initial estimate. The China Development Bank (CDB) also set loan interest at 3.4 percent, higher than the government's expectations, namely 2 percent. Not only that, the government was asked to guarantee the payment of the installments through the APBN through PT Penjaminan Infrastructure Indonesia (Persero).

Not only do we need China, but China also needs us.

Learn from mistakes

Director of the China-Indonesia Center of Economic and Law Studies (Celios), Muhammad Zulfikar Rakhmat, when contacted separately, reminded the government not to be hasty and repeat the same mistakes as before.

Learning from the experience of preparing for Whoosh, the study was only conducted for four months from May to August 2015. The impact of this fast-paced preparation phase resulted in the delay of the construction project by up to five years, from the scheduled year of 2019 to 2023.

MACHRADIN WAHYUDI RITONGA

Passengers get off the Whoosh fast train at Padalarang High Speed ​​Train Station, West Bandung Regency, West Java, Wednesday (4/10/2023). This station serves passengers going to Bandung City using feeder trains.

Many fundamental problems, such as land acquisition which was not thoroughly considered during the feasibility study stage, have caused long delays in the project. There are also factors that are difficult to predict, such as the Covid-19 pandemic in 2020-2021.

Finally, there was a cost escalation of over 20 percent. Indonesia had no choice but to comply with China's request to use the state budget as collateral for the Jakarta-Bandung high-speed train debt. However, the initial proposal scheme offered by China did not involve the state budget at all because the cooperation project was purely business-to-business.

Also Read: Homeland's Transportation Dream Moves Forward in Whoosh

This has raised concerns from many parties regarding the "debt trap" that could burden the country's finances for a long period of time.

"We have to be more careful, don't rush, because the root of our problem in the past was that the feasibility studies were too short, plus the government didn't dare to negotiate, always feeling like they didn't have a bargaining position. . "In fact, it's not just us who need China, China also needs us," he said.

"For the 'sequel' project to Surabaya, according to him, the government needs to be firm in negotiating the partnership contract from the beginning. Firstly, the related lobby about the loan interest rate needs to be more courageous. Secondly, the government needs to be clear about not burdening the state budget as a project debt guarantor. Thirdly, there is no need to rush in conducting a feasibility study."

According to Celios research, over the past decade, Indonesia's debt to China has continued to increase. Indonesia's foreign debt to the Bamboo Curtain Country reached 20.225 billion US dollars or equivalent to 315.1 trillion rupiah in 2022. However, a decade earlier, Indonesia's debt to China was recorded below 10 billion US dollars.

"However, we are still far from falling into the trap of debt, not like other countries. What is important is that we must be bold in negotiations, not feel weak first and not be too hasty," said Zulfikar."