Indonesia picked China over Japan to build the nation’s first fast-train rail link, because Beijing had the “courage” to provide US$5 billion in loans without asking for guarantees, an Indonesian official said yesterday.
The two Asian giants had been battling for months over the high-profile contract to build a railway linking the Indonesian capital, Jakarta, with the textile hub of Bandung.
Indonesia initially envisaged a high-speed service for the 150km journey, but this month changed its mind, opting instead for a medium-speed train.
Analysts have said whoever won the bid could be a front-runner for future rail projects in the region, including one linking Kuala Lumpur and Singapore.
Indonesian President Joko Widodo’s administration was said to prefer China’s proposal because it is less burdensome and promises a larger share of technology transfer than Japan.
“The government of China has courage not to ask for guarantees from Indonesia,” Gatot Trihargo, deputy assistant for the state-owned enterprises ministry, told reporters yesterday. “While other countries ... request government guarantees, we cannot afford this, because our budget is limited.”
The high-profile contract is a victory for Chinese President Xi Jinping’s (習近平) “One Belt, One Road” initiative to build a network of ports, trains and expressways to help expand trade, investment and influence in the region.
For Japan, the rail project was a difficult loss after last-minute efforts by Japanese Prime Minister Shinzo Abe to provide a better offer than China.
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