Japan slams award of Jakarta railway project 'to China'

TOKYO • Japan yesterday said its bid to build a major railway in Indonesia had been rejected, with China instead to be awarded the project - slamming the decision as "extremely regrettable".

China and Japan had for months been vying to build a new railway in Indonesia, as Asia's two biggest economies increasingly battle for influence across the region.

Indonesia had originally invited bids for its first high-speed railway between the capital Jakarta and the mountain-fringed city of Bandung, but unexpectedly changed plans this month and opted instead for a cheaper and slower option on the same route. China and Japan submitted new proposals.

Japan's top government spokesman Yoshihide Suga said an Indonesian government envoy had informed him yesterday that Tokyo's bid had been rejected.

"Japan offered the best possible proposal," he told reporters. "The envoy came here to explain that the Indonesian government has welcomed the Chinese proposal.

"I can't understand that at all. I frankly told the envoy that it was extremely regrettable."

He said China's new proposal did not involve the Indonesian government taking on any financial burden, or guaranteeing the project, adding: "It is an unthinkable proposal for our country."

The Indonesian government did not immediately confirm the decision. However, State-Owned Enterprises Minister Rini Soemarno suggested the Japanese bid had lost.

"The government stressed that (the project) should not have government funding nor a guarantee - Japan's proposal asked for a government guarantee," she said.

The rail project is a key part of President Joko Widodo's drive to build more infrastructure. He pledged upon taking office last October to overhaul Indonesia's ageing roads, railways and ports but has struggled to get his agenda moving.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on September 30, 2015, with the headline 'Japan slams award of Jakarta railway project 'to China''. Print Edition | Subscribe