JAKARTA, Indonesia (AP) — China has emerged as the likely builder of Indonesia’s first high-speed rail line after Indonesian officials rejected Japan’s requirement for a government guarantee of loans.
China and Japan had been competing to construct the high-speed rail system, each offering low-interest loans and other perks as they vied to secure the estimated $5.3 billion high-profile railway contract.
The 150-kilometer (93-mile) Jakarta to Bandung high-speed line is part of 750-kilometers (466 miles) of new rail planned for Indonesia.
Indonesia’s presidential chief of staff Teten Masduki said Wednesday that Japan lost out because its proposal was more about government-to-government cooperation. Indonesia required business-to-business cooperation without Indonesian fiscal spending or debt guarantees.
A spokesman for Japan’s foreign ministry said the Japanese government had been informed of Jakarta’s decision.