A passenger train crosses a bridge as it travels from Jakarta to Bandung near Padalarang

Indonesia delays decision on high-speed rail project

Indonesia will delay a decision on whether to award a contract to build the country's first high-speed railway to China or Japan, a senior official says.

The two Asian giants are engaged in an aggressive bidding war over the $5bn (£3.3bn) project to build a 150km link between the capital, Jakarta, and the textile hub of Bandung, which analysts believe may decide the front runner for other high-speed rail projects coming up in Asia over the coming years.

President Joko Widodo had previously been expected to announce a winner as early as this week, but Cabinet Secretary Pramono Anung said Widodo planned to make a decision based on a review of the two countries' proposals by an independent consultancy and a team of cabinet ministers.

"The president has extended the time for the review until September 7, so that the process is fairer," Anung told reporters, adding that the announcement of the winner could come any time after that.

Indonesia is caught in a difficult position as it has to decide between its top trading partner China and it's second largest investor after Singapore in Japan

Last week, Indonesia's deputy minister of infrastructure and regional development Luky Eko Wuryanto said: "We have two partners and it will be good if we can maintain both of them. We have to be smart when taking this decision."

Two government sources have said China is currently leading the race. "Indonesia is leaning towards China because their proposal is less financially burdensome on the Indonesian government and because the issue of safety has been adequately addressed," one said.

The other source said Indonesia wanted to strike a balance between the two powers in handing out high-profile infrastructure projects and Japan already holds contracts to build Jakarta's mass rapid transit system and the biggest coal-fired power plant in the region.

Indonesia's state enterprises minister said that if China were to win the contract, state-owned companies PT Wijaya Karya, PT Jasa Marga, PT Kereta Api, and PT Perkebunan Nusantara VIII would be involved in the consortium with China.

"There is truly no burden on the government," the minister, Rini Soemarno, told reporters today.

The line should cut the journey between Jakarta and Bandung to 35 minutes from about three hours, with trains travelling at more than 300km/h, and Indonesia hopes to extend the line later to connect Jakarta with the city of Surabaya.

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