Indonesia’s Lessons Learned  – The Diplomat

It will be an understatement to say that October was a momentous month for China’s Belt and Highway Initiative (BRI). Beijing celebrated the initiative’s tenth anniversary by holding the third Belt and Highway Discussion board; across the similar time, its signature high-speed railway (HSR) in Indonesia turned operational. The launch of “Whoosh,” the Jakarta-Bandung HSR, on October 2 has been touted as a big achievement for Indonesia and level of satisfaction for China’s BRI. 

In the course of the Belt and Highway Discussion board, Chinese language President Xi Jinping and Indonesian President Joko “Jokowi” Widodo applauded the railway line at their bilateral assembly, claiming that it was a hit and accomplished on time. As the primary HSR in Southeast Asia, the challenge holds large potential for Indonesia. By way of logistics, the railway cuts down journey time between the 2 cities from three hours to beneath one hour and addresses congestion that prices the economic system billions per 12 months. However maybe much more important are the alternatives that the switch of data and expertise can have for Indonesian business. 

Opening simply forward of the initiative’s tenth anniversary, the railway has been hailed as one of many BRI’s flagship initiatives. The railway has gained wide-ranging media protection and acclaim, and fairly rightly so. Nonetheless, it’s vitally vital to not conflate a profitable launch with a profitable challenge. As discussions ramp up for the extension of the road to achieve Surabaya, which is roughly 700 kilometers away from Jakarta, it’s important that classes realized from the Jakarta-Bandung HSR are taken into consideration for future infrastructure initiatives.

Whereas there’s actually no such factor as a “good” infrastructure challenge, the problems that plagued the Jakarta-Bandung HSR stem from a recurring trait in BRI initiatives: an absence of pre-project preparation and due diligence. This important section is the place challenge financiers, builders, and authorities officers undertake a spread of assessments and value determinations of the challenge from monetary sustainability to environmental impacts. When finished proper, these assessments can present important advantages to builders, officers, and communities alike, together with direct perception into the native environmental and social context, a construction for challenge monitoring and reporting, and alternatives to develop and implement plans and mechanisms to handle challenges as they come up. Conversely, with out the due diligence, issues can go flawed and might accomplish that in a short time. 

Following the choice to show down the Japanese proposal in favor of China’s bid in late September 2015, the Jakarta-Bandung HSR challenge was awarded to an Indonesian-Chinese language state-owned enterprise consortium, PT Kereta Cepta Indonesia-China (PT KCIC), in early October. The push was on to kick-start building on the challenge – a lot to its long-term detriment. 

On the identical day the HSR was assigned to PT KCIC, Jokowi signed Presidential Regulation No.107/2015 which sought to speed up the implementation of the railway challenge. In January 2016, he signed Presidential Regulation No.3/2016, which deemed the HSR a nationwide strategic precedence challenge and allowed for expediting the issuing of presidency permits. Regardless of its excessive precedence, nonetheless, the challenge wasn’t even included within the authorities’s preliminary Grasp Plan of Nationwide Railway. 

Three weeks afterward January 21, 2016, Jokowi attended the challenge’s ground-breaking ceremony in West Java. Regardless of the ribbon slicing, the Indonesian authorities had but to problem the permits to the contractors and the builders to start building, inflicting the challenge to return to a fast halt. It will take the Indonesian Ministry of Transport a further two months to course of the development permits for simply the first 5 km of the 142.3km railway. 

Illustrative of the push to push the HSR by, important elements of the pre-project preparation have been undertaken with lightening velocity. The feasibility examine, which normally takes 18 months was finalized in simply three months, and the environmental influence evaluation (EIA) which ought to take a 12 months to a 12 months and a half to finish, was finished in simply seven days. Unbiased analysts in Indonesia highlighted that the EIA uncared for to incorporate key parts together with the challenge’s influence on landslides, geological fault traces, and water catchments. 

All this due diligence and challenge preparation falling to the wayside was no small matter to the communities that the railway straight impacted. The shortage of a complete, clear, and a community-engaged EIA course of, particularly one which was undertaken with such velocity, resulted in communities in proximity to the railway line being left virtually utterly out of the loop on the challenge’s improvement and impacts. 

Residents of Laksanamekar village in West Bandung have been not noted of the EIA course of. When blasting started on one of many railway’s tunnels, not solely have been they caught off guard however their properties started to crack and the neighborhood loss entry to artesian water. This similar state of affairs occurred in different residential areas, together with West Java’s Tipar Sari Asih housing advanced, the place tunnel blasting inflicted important harm on properties. Moreover, as a result of rushed and haphazard EIA, modifications in land use weren’t adequately integrated within the evaluation, ensuing blocked drainage channels, disrupted waterways, and elevated flooding. 

Land acquisition and clearance proved to be one other important hurdle within the challenge’s improvement. After the issuance of presidency permits permitting building to start, which was initially slated for August 2016, PT KCIC had but to obtain and clear a majority of the land wanted for the challenge. By September 2017, the consortium introduced that it had solely cleared 55 p.c of the land wanted for the railway. It will take till roughly mid-2019 – three years after the bottom breaking ceremony occurred – for the land acquisition course of to be finalized. 

Because of not solely the land acquisition challenges but in addition the impacts of COVID-19 and shoddy challenge administration, the challenge rapidly started to see important value overruns. The preliminary price ticket for the railway line was $5.5 billion. That quantity rapidly ballooned within the subsequent years to roughly $7.2 billion. The mounting challenge prices brought on Jokowi in September 2021 to override a earlier 2015 decree that prohibited state funds going to the railway by the signing of Presidential Regulation No.93/2021, which paved the best way for presidency funds for use to finance the railway. 

The uncertainties surrounding funds and the challenge’s sustainability don’t cease there. The announcement in 2019 that Indonesia would shift its capital from Jakarta to a brand new, however but to be constructed metropolis, Nusantara in East Kalimantan province, sparked additional considerations over the railway’s long-term viability. When the preliminary feasibility examine was undertaken in 2017, challenge builders assumed that each day passenger quantity could be roughly 61,000 and even then it could take 26 years for the challenge to interrupt even. With the probably relocation of over 1.5 million authorities workers and their households from Jakarta to the brand new capital, PT KCIC adjusted its assumptions, considerably lowering the each day passenger demand to 31,000 – subsequently extending the timeline to 40 years to interrupt even. 

Additional highlighting the precarious state of its monetary sustainability, the Indonesian and Chinese language governments got here to an settlement that they should allocate $64.3 million yearly to only cowl the railway’s operational and upkeep prices. That is no small matter particularly because the Indonesian authorities is more and more elevating the prospect of extending the railway line to Surabaya, which is over 700 km away from Jakarta. 

With the Indonesian authorities saying on November 1 that it’s going to work with China Railway Group, one of many main shareholders of PT KCIC, to undertake a joint examine on the Surabaya extension, it’s important – particularly for native communities and stakeholders –that missteps and classes learnt from the Jakarta-Bandung HSR aren’t repeated or misplaced. 

In in search of to supply steerage on how greatest to undertake pre-project planning and due diligence and as a corollary enhance challenge outcomes, the Asia Society Coverage Institute developed a Belt and Highway Initiative Toolkit to help native communities and corporations engaged within the initiative to make sure that initiatives are developed to be inclusive and environmentally and socially sustainable. Out there in English, Mandarin, Bahasa Indonesia, Khmer, and Lao, the toolkit comprises key info on greatest practices on conducting EIAs, the way to undertake stakeholder engagement all through the lifecycle of the infrastructure challenge, and what Chinese language and worldwide legal guidelines and insurance policies related to the initiatives.