High speed train has different mission

JAKARTA. The National Development Planning Board (Bappenas) said the project of the Jakarta-Bandung high speed train is different in mission from ordinary trains.

"High speed train is a trigger, a key driver for area development. While ordinary trains are concerned only with taking passengers," Bambang Prihartono, the transport director at Bappenas, said here on Saturday.

Bambang said many people are mistaken about the purpose of the project of the Jakarta-Bandung high speed train.

"There is greater gain from the project in area development," he said without specifying, but he added, "therefore, it could not be apples to apples." The elevated track will extends 150 kilometers between the two largest cities in western part of Java with four stations - Halim, Karawang, Walini, Gedebage.

It will be built by PT Kereta Cepat Indonesia China, a joint venture between China Railway International Co. Ltd and a consortium PT Pilar Sinergi BUMN Indonesia (PBSI), that groups four state companies - PT Wijaya Karya, PT KAI , PT Jasa Marga and PT Perkebunan Nusantara VIII.

Bappenas has asked PT Kereta Cepat Indonesia China (KCIC)to make complete its licenses and start construction of the US$5 billion project immediately.

Construction should not be delayed to be able to complete the project as scheduled in 2018, as as not to risk change in policy after possible change in government in 2019, Bappenas said.

Earlier, Minister for State Enterprises Rini Soemarno said KCIC needs legal guarantee from the government for operatio0n not for loan.

Rini wanted to repeat stressing that the project would be built on business to business scheme without involving the government in financing.

The guarantee asked from the government is that there would no change in policy during the contract period of 50 years, before the assets would handed over to the government.

In the event of change in policy such as by new government, KCIC should be given additional option and right to renegotiate the contract, Rini said.

It is normal for long term investment to ask for guarantee for legal certainty, she said.

"Guarantee for long term investment must be committed by the provider of license that it would not be revoked before the contract is over," she said.

KCIC is expected to contribute an estimated Rp13 trillion in taxes to the state treasury in 15 years.

In addition, the project will provide an estimated 39,000 jobs during the three years construction , 20,000 jobs during the 15 year construction of Transit Oriented Development (TOD) and 28,000 jobs during the operation of TOD for 25 years.