Japan loses Indonesia high-speed train contract to China

Touted as the first high-speed railway for the emerging nation, connecting the capital of Jakarta and the West Java provincial capital of Bandung within 36 minutes, the high-profile project pitted Japan and China against each other, with both lobbying hard to win the US$5 billion (S$7.14 billion) contract.


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. The new proposal was accepted by Indonesia.

“The Japanese government still believes our proposal was the better and most feasible one”, Japanese embassy official Kijima said.

The Indonesian government “is considering welcoming China’s proposal”, Sofyan Djalil, Indonesia’s national development planning minister, told Yoshihide Suga, Japan’s chief cabinet secretary.

China came back with a modified proposal which did not require the Indonesian government to earmark funding. “I can’t understand that at all”.

Tuesday’s announcement that representatives had been sent to Japan and China suggested the project had gained renewed impetus, although possibly with a compromise between the original high-speed plan and the medium-speed alternative.

The Indonesian government did not immediately confirm the decision.

According to Pramono, Minister Sofyan’s explanation to Shinzo Abe comprises three points: the train project must be business to business (b to b); it will not use Indonesia’s state budget; and there will not be a guarantee from the Indonesian government. He pledged upon taking office in October to overhaul Indonesia’s ageing roads, railways and ports but has struggled to get his agenda moving.

Japan’s loss came despite its reputation as a world-class train maker.

The Abe administration has promoted exports of Shinkansen bullet train technology as a key pillar of its economic growth strategy.


China has countered this by arguing it has built thousands of kilometres of high-speed railway in the 12 years since it began constructing bullet trains. In 2011, one of its trains crashed, killing at least 40 people and injuring 200. China was the only other country that put in a comprehensive feasibility study.