Indonesia accelerates key projects with Japan

Indonesian Transportation Minister Budi Karya Sumadi (R) inspects the LRT Palembang project in May 2018 (Photo: Indonesia's Transportation Ministry)

Jakarta (VNA) - Indonesia is pushing for faster progress on flagship infrastructure projects on which it is cooperating with Japan, but various issues have yet to be settled, including pricing.

Transportation Minister Budi Karya Sumadi met with top officials in Japan last week to discuss several projects, including the second phase of MRT Jakarta, the Makassar-Parepare railway, Patimban seaport and a vehicle roadworthiness testing and certification facility (BPLJSKB) in Bekasi, West Java.

During his visit, Budi asked the Japanese government to adjust its bid price for the Jakarta MRT Phase 2 project, saying that the developer’s proposed price was “too high”.

The Japanese Embassy in Indonesia said Tokyo is working with the Japan International Cooperation Agency (JICA) to help operator PT MRT Jakarta and other negotiating companies reach an agreement on the completion date and close in on agreeable prices.

Japan’s Sumitomo Mitsui Construction Company won a contract to build part of the MRT Jakarta’s phase-two development over a 72-month schedule that starts this month and ends in August 2027.

The Makassar-Parepare railway project, on the other hand, is proceeding as planned and nearing the financial close, according to Budi. The construction work is divided into five stages, one of which is expected to break ground by the end of this year.

Meanwhile, Indonesia said it welcomed Japan’s interest in the public-private partnership (PPP) scheme for developing the BPLJSKB in Bekasi. The minister said that a Japanese company is participating in the project’s ongoing auction, without naming the company.

The Patimban Port project is almost complete, with the port slated to commence operations in December.

During his visit, Budi also invited Japanese stakeholders to collaborate in the construction of five seaports, including New Palembang Port in South Sumatra, Gorontalo Port in North Sulawesi and Batam Port in Riau Islands. The Investment Coordinating Board (BKPM) data show that Japanese investment in Indonesia has increased significantly over the past three years, rising 175 percent from 3.2 billion USD in 2018 to 8.8 billion USD in 2020./.

VNA