Author Topic: Tempo English Version 2018, May 14 - 20  (Read 1140 times)

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Tempo English Version 2018, May 14 - 20
| May 16, 2018, 12:30:16 PM

2018, May 14 - 20 --- Tempo

The mega rail project got off to a rocky start because of poor planning. And it looks like the project will miss its scheduled completion deadline set for next year. Even the first loan of US$170 million, or around Rp2.38 trillion, from the China Development Bank disbursed three weeks ago will not help much. It would be nearly impossible to complete such a massive amount of work in a short time: from land acquisition and construction to building residential and shopping centers around the four stations.

It's also important to ensure that the US$6.071 billion project will start to make profit once construction is completed. The Kereta Cepat Indonesia China consortium must be able to maintain and operate "bullet trains" economically without tariff subsidies. Should the fast Jakarta-Bandung train operate at a loss, the consortium would find it hard to repay the loan. Given the volatile exchange rates, taking into account revenues will be in rupiah, foreign-currency loans carry significant risks. The debt of principal loan plus interest would swell should the rupiah remain unstable. Four companies joined in the consortium -- Wijaya Karya, Jasa Marga, Kereta Api Indonesia and Perekebunan Nusantara -- must dig deeper into their pockets.


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