Indonesia Negotiates Interest In Jakarta-Bandung High-speed Train Debt To China To 3 Percent

Fast Train (Photo: Doc. Antara)

JAKARTA - The government continues to negotiate an interest rate or interest rate with the China Development Bank (CDB) to 3 percent of the proposed IDR 8.3 trillion. This loan is for funding the Jakarta-Bandung High Speed Rail (KCJB) project.

Deputy Minister of SOEs II Kartika Wirjoatmodjo said the CDB set interest on debt by 3.4 percent from the previous 4 percent. However, the government wants the interest on the debt to decrease to 3 percent.

"Again, we are negotiating with the guarantee scheme. Yesterday they have dropped it at 3.4 percent, we are still trying at 3 percent," he told reporters written Thursday, April 13.

Tiko, Kartika's nickname, hopes that two weeks there will be a decision from the CDB. He said that his party was also drafting a joint agreement contract.

"Later, maybe in the next two weeks, hopefully we will get a clearer response from them (CDB). We are starting to draft the agreement," he said.

Previously, Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan wanted negotiations so that debt interest fell to 2 percent when CDB installed 4 percent interest.

However, continued Tiko, negotiations to 2 percent were no longer carried out, because the US Treasury interest rate, which became a reference, had increased from the previous 2 percent to around 4-5 percent.

"So it's only natural to go up. But I think the increase is still very natural because we ask for a long tenor, more than 30 years and an interest rate of more than 10 years. So it's very soft, the debt is quite good," he explained.

As previously reported, the Ministry of State-Owned Enterprises (BUMN) will apply for a loan of US $ 550 million or equivalent to Rp. 8.3 trillion (assuming an exchange rate of Rp. 15,235 per dollar) to the China Depeloment Bank (CDB).

Deputy Minister of SOEs II Kartika Wirjoatmodjo said that this loan will be used to cover the cost overrun for the Jakarta-Bandung High Speed Rail (KCJB) project.

As is known, the Indonesian-China government has agreed on the amount of the swelling cost of the KCJB project of 1.2 billion dollars or around Rp. 18.2 trillion.

"Well, later on, we will apply for the loan portion of around 550 million dollars for the loan to be submitted to the CDB," he said at the DPR Building, Parliament Complex, Senayan, Monday, February 13.