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Rini Soemarno: It's an instruction from the President  

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19 October 2018 13:30 WIB

Rini Soemarno, State Owned Enterprises Minister. TEMPO/Dhemas Reviyanto

TEMPO.CO, Jakartav- China finally won the bid to build the Jakarta-Bandung high-speed rail system, shattering Japan's dream of raising their Shinkansen. The government's decision not only disappointed the Japanese, it triggered many questions, because not too long ago, President Joko Widodo rejected both proposals with the excuse that he wanted no state funds involved in the project. Why then was China suddenly chosen?

Unlike her colleagues who appear to have kept their distance from the Chinese consortium, State-Owned Enterprises (SOE) Minister Rini Soemarno had always, from the start, been close to the Chinese consortium. This prompted criticism of fellow ministers, like Economic Coordinating Minister Rizal Ramli and others. Today, there's clearly an air of competition inside the cabinet meetings.

The SOE minister recently spoke to Tempo reporters, Retno Sulistyowati, Akbar Tri Kurniawan, Pingit Aria and Khairul Anam, to explain why the government chose China over Japan.

You just did a shocking thing: signed an MoU on the high-speed railway project with China, when the National Planning and Development Board (Bappenas) and the Japanese had long been studying over it.

We look at it from the potential of building an industry. For state-owned companies, there's no way that technology can be transferred or raise value added domestically. There's the light rail transit by Adhi Karya, which has begun construction on the Cibubu-Jakarta route, as well as a high-speed rail between Jakarta and Bandung, with great prospects. We didn't know Japan had submitted a proposal to Bappenas. As a state-owned enterprise, we initially thought to build it on toll roads, so we wouldn't have the difficulty with land releases. I also thought about going business-to-business. Both President Xi Jinping and President Joko Widodo supported the idea of doing a feasibility study first. China responded very quickly, sending many people to do the study.

How can you not know that Bappenas and Japan were doing a study on this project?

I was not well-informed. What I know is that there was a study. There was no thought about constructing it. I received a report that constructing it was still a long way, in 2020. I'm not sure how it came about. But what we know is that there is no detailed proposal. We checked with Bappenas. Yes, there was a study, but nothing about building it now.

Why not just have a beauty contest?

Two proposals were submitted. China did a business-to-business and submitted the proposal. Japan did too. Both proposals were opened and placed side by side. We were transparent about this. In evaluating it, we did not discuss technical issues. We specified the payment structure offered. We also wanted in detail the issue of technology transfer.

Didn't a cabinet meeting decided to cancel the high-speed rail system and change to a medium-speed rail system?

No, you misunderstood. It was emphasized that the government will not carry out a high-speed train project. The government also did not want to use the State Budget (APBN) and refused to provide guarantees. But the President said, why doesn't the SOE ministry look at the business-to-business angle. Well, the B-to-B seems to fit. One of the items discussed at the consortium was the return of investment (ROI), whether it would be better if the train's speed was 250-300, not 350 kilometers per hour.

The Economic Coordinating Minister said there would be an open tender on the medium-speed rail project.

I don't know. I was informed, by the President on the phone, because I was at the House of Representatives (DPR) at that time. I was told that it was now the responsibility of the SOE ministry, because it was B-to-B.

The President called?

Not the President himself but Mas Teten (Teten Masduki, presidential chief of staff), who called that it was the President's decision. From the start, Mas Teten told me, "Bu Rini, Bapak President decided that the government will not implement the high-speed train project. The government also does not want to use State Funds and to provide guarantees. So go ahead and allow SOEs to look at it from the business-to-business side. (*)

Read the full interview in this wek's edition of Tempo English Magazine



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