Japan & Indonesia to Cooperate on Key Infrastructure Projects
Indonesian President Joko Widodo and Japanese Prime Minister Shinzo Abe will witness the signing of a joint study (a cooperation between Indonesia's Transportation Ministry and the Japan International Cooperation Agency, or JICA) into the medium speed railway - connecting Jakarta to Surabaya - on 15 January 2017 at the Presidential Palace in Bogor. Besides the medium speed railway, Widodo and Abe will also discuss funding for a deep-sea port project in Patimban (West Java) as well as contracts for the Masela oil & gas block in eastern Indonesia.
Luhut Panjaitan, Indonesian Minister for Maritime Affairs, said a number of big infrastructure projects in Indonesia will be financed by the government of Japan through public-private partnerships (PPPs). Last month Japan and Indonesia agreed to cooperate in three projects.
One of these projects is the USD $7.8 billion medium-speed railway between Jakarta (West Java) and Surabaya (East Java), a 727-kilometer journey. These cities are the two biggest cities in Indonesia, and are known as the nation's industrial centers. Currently, it takes about ten hours to travel from Jakarta to Surabaya (and vice versa) by train. However, travel time between both cities can be shortened to about five hours by the new rail-link. Due to the high costs the Indonesian government may decide to split the project in two parts: (1) Jakarta - Semarang, and (2) Semarang - Surabaya. If all preparations and discussions go smoothly, then construction could start at the end of 2017.
Secondly, Japan is eager to be involved in the USD $3 billion Patimban deep seaport project. This seaport, located some 100 kilometers from Indonesia's capital city of Jakarta, is envisaged to become an international seaport with a 7.5 million twenty-foot equivalent units (TEU) capacity, hence somewhat relieving busy traffic at Jakarta's Tanjung Priok port (Indonesia's busiest port and that handles around 65 percent of the nation's international trade).
The third project, the Masela oil & gas block in Maluku, involves the negotiations of Japanese gas firm Inpex Corporation's contract.