Indonesia scraps fiercely contested rail project in favor of slower train

Indonesia scraps fiercely contested rail project in favor of slower train

Indonesia scrapped plans for its first high-speed railway and asked China and Japan, who were battling over the multi-billion dollar contract, to submit new proposals to build a slower train, a senior minister said on Thursday.

The two Asian giants had lobbied heavily up to Monday’s deadline for the contract. But in the end, President Joko Widodo decided that Indonesia did not need a train that could reach speeds of more than 300 km per hour.

“The president has decided don’t make it a high-speed train. It is enough to have a medium-speed train,” chief economics minister Darmin Nasution told reporters.

He said that both China and Japan can submit new proposals to build a slower rail link between the capital Jakarta and the textile town of Bandung, to the south.

The contract for a 150-km (94-mile) rail line linking the two cities, which would have cut the journey to 35 minutes from around three hours currently, had provoked stiff rivalry between China and Japan.

It also put Indonesia in a diplomatic bind. Japan is Indonesia’s second-largest investor, while China is its top trading partner.

Last month, Japan and China both sent envoys to try and win over Indonesian officials, each sweetening the terms of their bid for the contract worth about $5 billion.

(c) Copyright Thomson Reuters 2015.

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