President to Decide Winner of High Speed Rail Project

KATADATA ? The assessment team that was formed to evaluate the proposals to construct Jakarta-Bandung high speed rail has chosen the winner of the tender. The team which is under the coordination of the Coordinating Minister for Economic Affairs is expected to deliver its assessment results to President Joko Widodo today.

Darmin said that the assessment team has received the recommendation results from an international consultant, Boston Consulting Group, to help them decide the tender winner. Unfortunately, he is unable to disclose the winner that will be recommended to the President.

?We have received the recommendation, but we have to report this to the President first,? said Darmin after a meeting between High Speed Rail Assessment Team and Boston Consulting Group at his office in Jakarta on Wednesday (9/2).

The assessment team consists of the Coordinating Minister for Economic Affairs, Coordinating Minister for Maritime Affairs, Transport Minister, Minister of SOE and Head of National Development Planning Agency (Bappenas).

Darmin explains that Boston Consulting Group (BCG) used four criteria related to the construction of high speed rail such as government?s guarantee, technology and safety, socio-economic, and project planning.

BCG will give score for each criteria based on the proposals submitted by the Chinese and the Japanese governments. Darmin said that Japan excelled in technology and safety categories while China excelled in socio-economic aspect.

?We will discuss and recommend the results based on the scores,? he said.

Nevertheless, Darmin said that it?s up to the President to decide the winner of the project.

On the same occassion, Transport Minister Ignasius Jonan said that the assessment team and the President will discuss the winner of the project. He said that his Ministry will only present its views on the safety aspect of the project. ?It?s because our main concern is the safety,? he said.

Based on the proposal put forward by China, investment for the project amounts to US$5.5 billion or IDR74.7 trillion. They also promise that the project will be completed in three years. China also offers a loan for the project. The interest rate is 2 percent over a 40-year period with 10 years grace period included.

Meanwhile, Japan via its Japan International Cooperation Agency (JICA) reveals that according to their study, the project will cost IDR60 trillion. The funding of which will be 74% from state owned enterprises, 16% from the government, and the remaining from private investors. As for the management, they recommend the formation of a special state-owned enterprise to run the high speed rail.