After intense competition with Japan, in 2015, Chinese companies won the contract to build the 5.5-billion-USD Jakarta–Bandung high-speed railway (HSR) line. The Chinese Government regards the project not only as an icon of the Belt and Road Initiative, but also an exemplary case of HSR export as, for the first time, the Chinese railway sector is able to export the entire HSR industry chain to a foreign country. HSR is touted as a new mechanism for cooperation that boosts connectivity and technological transfer from China to Southeast Asia.

Project Impacts

• Land: The delay in loan disbursement was one of the main factors that impeded construction of the HSR from 2016 to 2018, due to inadequate preparation in the land acquisition procedures.
• Environment: According to local nongovernmental organisation (NGO) Indonesian Forum for the Environment (Walhi), project construction has caused flooded roads, landslides, and damaged houses in part due to shoddy management and poor environmental protection procedures. As the planned route of the railway cuts through important water catchment areas, mountainous regions, and agricultural areas, the project has also impacted water supplies and caused environmental stress to the surrounding areas.
• Fiscal impact: Due to poor preparation and multiple technical challenges, the project has incurred cost overruns. In 2017, the budget swelled from 5.5 billion USD to 6.1 billion USD. Economists and policymakers have questioned the viability of the project, worrying it will drag Indonesia into a debt trap.
• Employment and labour rights: The project was expected to create 39,000 jobs—both casual and permanent—during its three-year construction phase, but no data are available to show whether this promise has been fulfilled. Meanwhile, for its operation, KCIC is set to offer 2,400 local jobs and the recruitment process was under way as of April 2021.