CRH380 (China Railway High-speed) Harmony bullet trains are seen at a high-speed train maintenance base in Wuhan, Hubei province, Dec 25, 2012. [Photo/Agencies]

NDRC official hardsells China's high-speed rail capabilities and sweetens bid for Indonesian line

China is ready to start construction on the Jakarta-Bandung high-speed rail project in Indonesia in September and complete the project within 2018, if it wins the contract, Xu Shaoshi, head of the National Development and Reform Commission, the nation's top economic planner, said in Jakarta.

"The financial plan we are offering is cost-effective. The railway would be constructed by joint venture management between China and Indonesia, and the two countries will cooperate in personnel training, technical transformation and construction," Xu said during an official visit to Indonesia.

China and Japan have been lobbying hard to win the rail contract. With their substantial expertise in high-speed rail construction, the competition has been intense between the two economies. Japan has promised to begin construction in three years and complete the project in eight years.

Indonesian government officials are believed to be studying both the proposals and are likely to take a formal decision later this month, the Associated Press reported.

The railway, which will be Indonesia's first high-speed line, will connect the Indonesian capital Jakarta and the fourth-largest city Bandung, about 120 kilometers southeast of Jakarta. The railway is part of the 750 km project that would finally connect Jakarta to Surabaya, the country's second-largest city.

The Jakarta-Bandung line will be about 150 km in length. If calculated by the maximum speed of 300 km per hour, the transit time between the two cities will be cut to 36 minutes from two to three hours. A one-way ticket on the route is expected to cost about $20.

The railway will have eight stops along the route, and shape a high-speed rail economic belt. According to initial calculations, the railway is expected to make profits five years after it starts operations.

Xu, who is also the special envoy of President Xi Jinping, officially submitted the proposals for the railway project earlier this week. China has improved its original proposal and offered a more competitive financial plan.

According to central government estimates, the Indonesian railway project is expected to cost about $5.5 billion and China is offering Indonesia 50-year loans with annual interest of 2 percent, the Associated Press said. Japan has offered loans of $4.4 billion with a 40-year repayment period and an annual interest rate of less than 1 percent.

President Xi Jinping signed a comprehensive cooperation agreement with Indonesian President Joko Widodo in March, and China is willing to use the Asian Infrastructure Investment Bank and the Silk Road Fund to facilitate Indonesia's development of ports, high-speed railways, airports, shipbuilding and special economic zones in coastal areas.

Xu Liping, a senior researcher in Southeast Asian Affairs at the Chinese Academy of Social Sciences, told the 21th Century Business Herald that China has advantages in completing the project with a high efficiency, and the price is relatively cheaper. In addition, the Chinese government is strongly backing the project.

"Nevertheless, Indonesia considers China has defects in railway management, especially in signal management. Japan's Shinkansen, or bullet train, enjoys a long history, whereas China has a relatively shorter history in high-speed railway construction. The two sides have certain gaps in this sense, but the gaps should be narrowed gradually," he said.

When it comes to if the construction can adapt to the local climate, there are few cases to follow about building a high-speed rail in a tropical area. Still, China has built the world's only tropical high-speed rail in Hainan province, and Hainan has a similar climate to Indonesia. Japan built its high-speed rail in temperate zones.

"China's high-speed train technology is quite developed and comprehensive, and we have experiences in constructing and operating high-speed rail in various geological and topographical conditions," Xu from the NDRC said. "For instance, we have five years of successful experiences in operating high-speed rail in Hainan. The route has a length of 350 km, and the train runs at 308 km per hour."