Holiday Ayo - The Jakarta-Bandung fast train project (KCJB) is experiencing cost overruns. Discussions about the cost overrun itself have been going on since last year, but it is only now that there has been an agreed value on the amount of the project's swelling cost being worked on by the Indonesia-China consortium.

The Indonesian consortium working on the KCJB project applied for a loan from the China Development Bank (CDB) of IDR 8.3 trillion. The debt to cover the cost overrun was submitted only four months before KCJB was targeted to be completed and operational in June 2023.

As cited from kumparan.com, Deputy Minister of BUMN II, Kartika Wirjoatmodjo, disclosed the application for debt to complete the high-speed train project. He stated that this step was taken after Indonesia and China agreed on a cost increase for the KCJB project of USD 1.2 billion or the equivalent of IDR 18.2 trillion.

"We agree on a cost overrun figure of USD 1.2 billion, this is what we are currently working on, namely a number of items they are conducting a study on taxes, clearing frequency and so on, but the figure has been agreed," he said during a Working Meeting with Commission VI of the DPR, Monday (13/ 2).

Met after the meeting, Kartika, who is familiarly called Tiko, said that 75 percent of the portion of the increase in costs would be covered through loans, while 25 percent would be met by the equity of the Chinese and Indonesian consortium.

He also said that Indonesia and China had agreed to share the loan portion for this cost increase, namely 60 percent by the Indonesian consortium, and 40 percent by the Chinese consortium.

With these calculations, Tiko also disclosed that the total loan to be submitted by the Indonesian consortium to CDB is USD 550 million or equivalent to IDR 8.3 trillion.

"The portion we will need is around USD 550 million, we will submit it to the CDB. We are currently discussing the final structure and price. In the next week we should have a final structure and the price will be signed in the form of equity," said Tiko.

Furthermore, Tiko revealed that the fulfillment of the 25 percent equity portion by the Indonesian consortium had also been fulfilled through PT Kereta Api Indonesia's (KAI) State Capital Investment (PMN) of IDR 3.2 trillion which was disbursed at the end of the 2022 period.