New Cities and Economic Centers along the Jakarta-Bandung Railway
Indonesia's first high-speed train, which will run between Jakarta and Bandung (in West Java) is expected to give rise to new economic centers and cities along the 142 kilometers-long railway. Construction of the project, estimated to cost a total of USD $5.5 billion, is scheduled to kick off on 21 January 2016 in Bandung as Indonesia's Transportation Ministry has finally issued the track permit (this had been a major hurdle previously).
Harun Alrasyid Lubis, Executive Director Infrastructure Partnership & Knowledge Center (IPKC), said the high-speed railway link between Jakarta and Bandung is not just a necessity in the context of transportation and the economy, but also forms a source of national pride as the country is currently still dependent on railways that were built by the Dutch colonizers.
The joint venture (JV) that is tasked to construct the Jakarta-Bandung railway is Kereta Cepat Indonesia China (KCIC). This JV consists of Pilar Sinergi BUMN Indonesia (which has a 60 percent stake in KCIC) and China Railway International Co Ltd (owning the remaining 40 percent). The project will be financed mostly throughh a loan from the China Development Bank.
The Pilar Sinergi BUMN Indonesia consortium consists of Indonesian state-owned companies Wijaya Karya, Kereta Api Indonesia, Jasa Marga, and Perkebunan Nusantara VIII.
Hendra Mardiana, Head of Planning and Development of PT Perkebunan Nusantara VIII (PTPN VIII), said the railway will be partly build on a 3,000 hectares-sized tea plantation that is owned by PTPN VIII. This state-owned tea and rubber plantation firm (part of the Pilar Sinergi BUMN Indonesia consortium) initially wanted to transform this tea plantation into a rubber plantation because rising temperatures in the area (after the Cipularang toll road has come online) curtailed the quality of harvested tea. However, after being included in the Jakarta-Bandung railway project, PTPN VIII's tea plantation will be used for the railway and additional infrastructure development.
Besides the development of a railway station, there are plans to develop a city, business center, convention center, educational institutions, agro-industry and agro-tourism in this area. This plan received a warm welcome from both the central and local governments as this area may become a new economic center in the region. The Governor of West Java in fact wants to add another 7,000 hectares (on top of PTPN VIII's 3,000 hectares) to develop new economic centers and attract foreign direct investment (FDI) in this region.
Therefore, the Indonesian government should rapidly start to prepare a master plan for the area to ensure an efficient state of affairs in terms of infrastructure development as well as to prevent skyrocketing land prices near the planned railway and to assess the environmental risks involved in the project.
It is currently being studied by the government whether the Jakarta-Bandung railway can also be integrated with other transportation projects, such as the Jakarta light rapid transit (LRT) that is currently being developed.
As this project also involves cooperation with China (Indonesia turned down Japan's offer to co-develop this railway), the project can become the first in a series of Indonesia-China infrastructure projects.
A one-way ticket is expected to cost IDR 200,000 (approx. USD $15). This is considered a good price, particularly given travel time between both cities will be reduced to 35 minutes (the train can reach a speed more than 250 kilometers per hour). The railway is expected to be open to the public in 2018 or 2019.