Indonesia asks Japan to work on Jakarta-Surabaya train project

JAKARTA (Reuters) - Indonesia has invited Japan to submit proposals to work on a railway line connecting Jakarta to its second-biggest city Surabaya, the transport minister told Reuters on Saturday.

The project aims to slash journey times by more than half to around five hours on the roughly 600-km (400-mile) route, Budi Karya Sumadi said in his first interview with foreign media since taking office in late July.

Japan could provide a loan for the project, said Sumadi. Construction could be carried out through a partnership between Japanese and Indonesian companies.

“We are giving the priority to Japan,” Sumadi said at his house in Jakarta, adding that the project could include building a new line, upgrading existing tracks and supplying the rolling stock.

Japan has historically been one of Indonesia’s biggest investors, but was dealt a blow last year when the Southeast Asian country awarded China a high-speed train project linking the capital with the city of Bandung.

At an estimated cost of $5.5 billion, the line was seen as a coup for China, which is vying for influence in the region under its “One Belt, One Road” policy and has ambitions to be a global train supplier.

Analysts said the swing factor at that time was China’s willingness to forego a sovereign guarantee by the Indonesian government, which was requested by Japan to reduce the risk of taking on the project.

Indonesian Maritime Coordinating Minister Luhut Pandjaitan was in Tokyo earlier this week to discuss topics including the Jakarta-Surabaya project with Japan’s Prime Minister Shinzo Abe, according to a statement from the Indonesian government.

The project is likely to cost less than the Jakarta-Bandung rail awarded to China as the speed of the trains is slower and most of the land has been secured, Sumadi said.

Indonesia is unlikely to give any sovereign guarantee for this project either, Sumadi said. “We have had a lot of cooperation with foreign investors, and we’ve been delivering. There’s actually no need for a guarantee.”

Reporting by Cindy Silviana and Eveline Danubrata; Editing by Andrew Roche