Indonesia high-speed rail, nickel among RM423 bil priority projects

JAKARTA: Indonesia plans to extend a high-speed rail project being built with China and bring in Japanese investors, as part of 89 priority projects slated for Southeast Asia’s biggest economy over four years, a minister said on Friday.

The extension of the US$6 bil (RM26 bil) Jakarta-Bandung rail project is among 1,422 tril rupiah (RM423 bil) of national strategic projects for the 2020-2024 period, Chief Economic Affairs Minister Airlangga Hartarto said.

Such projects usually receive government support such as land-clearing assistance and tax incentives.

The rail project, part of Beijing’s Belt and Road Initiative being built by a consortium of Chinese and Indonesian state companies, is facing a one-year delay due to the coronavirus pandemic, Hartarto said.

To ensure that it is economically viable, President Joko Widodo has ordered the track to be extended to Surabaya, about 760 km east of Jakarta, and for Japanese investors to be brought in, the minister said.

China unexpectedly won the Jakarta-Bandung contract in 2015 despite stiff competition from Japan and Indonesian authorities had previously discussed with Japanese authorities a separate Jakarta-Surabaya rail project.

Other projects on the list include state energy company Pertamina’s plan to upgrade its Balongan refinery and transform it into a US$12 bil petrochemical complex, Hartarto said, adding it would partner with an unnamed Taiwanese company.

Pertamina in late 2018 signed a framework agreement with Taiwan’s CPC Corporation for a joint petrochemical business at an unspecified location worth US$6.5 bil.

Major nickel processing projects in the towns of Morowali and Konawe on Sulawesi island and Weda Bay on Halmahera island were also in the priority list, Hartarto said.

The government would also prioritise construction of an industrial estate in Brebes in Java to target companies that are relocating out of China, he said. – May 29, 2020, Reuters

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