SOE Minister: If It Continues To Be Postponed, The Budget For The Jakarta-Bandung High-speed Rail Project Could Swell Next Year

Illustration (Photo: Doc. Antara)

JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir said that the cost overrun or cost overrun for the Jakarta Bandung Fast Train (KCJB) project could increase again next year.

This, said Erick, if the KCJB project was postponed again.

Based on a study by the Supreme Audit Agency (BPKP), KCJB's budget swelled to USD 1.176 billion or approximately IDR 16.8 trillion.

"The fast train is the same, if this KCJB continues to be delayed, the construction price next year will be even more expensive. This means that it must be completed immediately,” said Erick at the National Library, quoted on Thursday, August 4.

In the KCJB project, Erick explained, 75 percent of the financing comes from loans from the China Development Bank (CDB) and the remaining 25 percent comes from equity.

“25 percent equity, of which Indonesia is 55 (percent), China is 45 percent. What does it mean? The PMN that will be given is part of the equity, because the loan will be added,” he said.

Previously, the proposal of PT Kereta Api Indonesia (Persero) for the addition of State Capital Participation (PMN) in 2022 of IDR 4.1 trillion had been approved by Commission VI of the Indonesian House of Representatives. The PMN will be used to strengthen KAI in completing the KCJB project.

At the end of 2021, Erick said that the KCJB project would not be stopped. Because, when he was appointed by President Joko Widodo (Jokowi) as Minister of SOEs, the construction of the project was already 60 percent running.

"This is when I entered (as Minister of SOEs), the KCJB project was more than 60 percent. Time to stop? Yes, it means that if you stop, the money will be burned. Everything is scrap metal," he said at the Kick Andy Show, quoted Monday, November 15, 2021.

For your information, the work on the KCJB project tends to slow down since it was built in 2016.

Until October 2021, the construction of KCJB has only reached 80 percent and is targeted to operate commercially in 2023.

One of the obstacles that hinder the development of the KCJB project is land acquisition.

Whereas the government had previously ensured that land acquisition for the project was completed in January 2020.

Then another problem is the change of construction design.

Previously, University of Indonesia (UI) senior economist Faisal Basri also criticized a number of transportation infrastructure projects built by the government.

The projects in question are airports, ports, and high-speed trains.

Faisal said that the infrastructure projects are considered redundant because they will not be profitable but the investment is very large.

Therefore, he considered, the current government is very wasteful, it can even lead to state bankruptcy.

"Soon people will pay for the fast train, which may cost IDR 400.000 one way, and it is estimated that until the end of the world there will be no return on investment," he said.