Kereta Cepat Indonesia China (KCIC) is seeking a USD1.03 billion loan top up from the China Development Bank (CDB) to cover cost overrun on the Jakarta-Bandung high speed rail (HSR) project in Indonesia. Initial cost of the project was expected to be around USD6.07 billion but has since increased by USD1.45 billion due to land procurement costs, multiple delays in construction and rising prices of materials.
Majority of the increase in cost (75 per cent) will be funded by a bank loan while the remaining 25 per cent will be funded through an increase in stakeholder capital. The developer has mentioned that without the release of required funds, opening of the line might be further delayed.
The 143.2 km HSR rail project, scheduled to be completed in June 2023, is part of the Government of China’s Belt and Road Initiative (BRI). Once operational, it will reduce travel time between Jakarta and Bandung from three hours to 40 minutes.
KCIC is a joint venture (JV) company comprising a consortium of Indonesian State-Owned Enterprises (BUMN) through PT Pilar Sinergi BUMN, and a consortium of Chinese railway companies through Beijing Yawan HSR.
