Indonesia inaugurates its first TGV, financed by China

Located between the Indian Ocean and the Pacific Ocean, Indonesia, the largest archipelago in the world, has 17,000 islands on its territory. And now a high-speed train. The island state inaugurated its very first TGV line on Monday. A unique event in Southeast Asia. The connection connects the bustling capital Jakarta to the large city of Bandung (142 km), known for its potential in high technology and innovation, in forty minutes compared to three hours previously. This high-speed train is “a symbol of the modernization of public transport (…) while respecting the environment,” rejoiced Indonesian President Joko Widodo at the opening of the line.

Since 2016, the Head of State has defended tooth and nail this flagship project of the executive as part of his plan to develop the country's infrastructure. Not without difficulty. The total amount of work soared to more than seven billion dollars, where estimates did not go beyond six, requiring tough financing renegotiations and an extension of public finances. The result of a partnership between four Indonesian national companies (60%) and China Railway (40%), the construction of this Chinese-designed train is part of Beijing's “new silk roads” initiative.

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This is a huge network program - roads, ports, railways and other infrastructure - launched ten years ago, financed with Chinese funds and which facilitates China's access to the rest of the world. “In this context, internal connectivity projects find logic,” explains Sophie Boisseau du Rocher, researcher at the French Institute of International Relations (Ifri). With this first TGV line in the region, China offers itself “a showcase for Chinese high-speed train technology which was until now held by Japan in Asia” in the archipelago of 275 million inhabitants. The second world power wants to strengthen its role as regional leader and is investing massively in the construction of new high-speed lines, such as in Pakistan, Thailand and Kazakhstan.

These very expensive projects are punctuated with controversy. While China promotes these initiatives as major pillars of its foreign and economic policy, concerns remain on the part of participating countries about the opacity of the agreements regarding the debt contracted. Beijing also won the Indonesian project from its great rival, Japan - which had positioned itself first - thanks to a more aggressive credit policy. Beijing has deployed “rail diplomacy”, underlines Manuelle Franck, Asia specialist and teacher at Inalco. Indonesia borrowed $560 million from the China Development Bank at the very high rate, for the time and this type of project, of 3.4% over forty-one years.

For Indonesia, the TGV line aims to decongest Jakarta, a priority, in a country where traffic jams cost several points of GDP each year. “A first metro line was inaugurated in 2019 and new lines are planned. The TGV is part of the same logic: to better distribute the population and facilitate mobility on the most populated island in the world,” explains Sophie Boisseau du Rocher. The TGV also ensures the influence of Indonesia, the largest economy in Southeast Asia. “Making a TGV that goes at 350 km/h is prestigious for the country,” says Manuelle Franck. This allows local actors to claim this great “Silk Roads” plan, as a sort of label.” However, the link, as it stands, offers moderate economic prospects for the country.

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“At first glance, this TGV will not be used for the transport of goods, so it is only a question of human mobility,” underlines Sophie Boisseau du Rocher. And again, this is hampered by the fact that the TGV stops in the suburbs of Bandung and not in the city center. It will take at least twenty to thirty minutes by bus to reach the heart of the flows! The first comments are also disappointed by this point. Indonesian Transport Minister Budi Karya Sumadi confirmed last week the government's intention to extend the line to Surabaya, the archipelago's second most populous city, an industrial center with a major port and a booming economy. expansion. But here too, the development opportunities remain relative given the complexity of the project, according to the Ifri expert. “It took seven years to build 142 km (equivalent to Paris-Rouen, Editor’s note), so to build 780 km? In regions with sometimes difficult terrain and preserved from an environmental point of view, it will not be easy.”