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Jakarta-Bandung High-Speed Train: A Public Service, Not a Profit Venture

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Olalekan Adigun
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In recent statements, Indonesian President Joko Widodo has clarified that the primary goal of the Jakarta-Bandung High-Speed Train project is to serve the public's transportation needs, not to generate profits. This clarification came in response to media queries about whether the project could be profitable or break even.

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PT KCIC: The Project Operator

President Joko Widodo deferred to PT Kereta Cepat Indonesia-China (KCIC), the operator of the project, for further information about the financial aspects. However, he emphasized that the project's primary purpose is to provide services to the public, not to make a profit. The project has been a subject of concern due to fears that it would not bring much benefit to Indonesia.

Insights from Business Expert Rhenald Kasali

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Rhenald Kasali, a business expert, had previously stated that public transportation projects are not about profit or loss. He cited European trains as an example, which continue to operate regularly despite not breaking even and being heavily subsidized.

The Jakarta-Bandung High-Speed Train Project

Launched on October 2, the Jakarta-Bandung High-Speed Train is Southeast Asia's first high-speed railway. With a capacity of 600 and a speed of up to 350 km/h, the train can make the journey between the capital Jakarta and Bandung in 45 minutes. The project, awarded to a consortium of Chinese companies in 2015, has gone over budget and been delayed by several years, currently costing over $7 billion, including an additional $1.2 billion to cover cost overruns.

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Challenges and Future Plans

As the project nears completion, questions remain about its commercial viability and some of the planning choices. For instance, the train does not go all the way into the city center of either Bandung or Jakarta. This choice was made by planners to avoid certain engineering and construction challenges, but it also entails some obvious trade-offs. Given that the project has incurred billions of dollars in loans from the China Development Bank and that government officials now want to extend the line all the way to Surabaya, the question on everybody's mind is, 'was it worth it?'

The direct economic benefits are questionable, considering the short distance between Bandung and Jakarta, which are already linked by many existing modes of transport. However, the intangible benefits, such as the transfer of technology skills and operational know-how, may ultimately determine whether the project was worthwhile.

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