In 2015, agreements on jointly building the Jakarta-Bandung High-Speed Railway (HSR) were signed. Eight years later, the rail project is attracting global attention with all systems ready for commercial operation.
The first high-speed rail in Indonesia and even Southeast Asia, the Jakarta-Bandung HSR is poised to not only facilitate infrastructure development and logistics improvement in Indonesia, but also provide strong momentum for construction of an economic growth belt along the route, creating new opportunities for the development of upstream and downstream industries.
HSR-based economic belt
After completion, the 142.3-kilometer Jakarta-Bandung HSR, with a maximum design speed of 350 kilometers per hour, will shorten the travel time between the two places from over three hours to 40 minutes.
The Jakarta-Bandung HSR will effectively save travel time, alleviate traffic congestion in Jakarta and surrounding areas, and facilitate population mobility.
According to Li Hongchang, a research fellow at the Center for Sustainable Transportation Innovation and vice president of the Research Institute for National Transportation Development at Beijing Jiaotong University, accelerated flow of talent, information, capital, and other factors results in a “siphon effect” on surrounding small and medium-sized cities.
This will help form a city cluster radiating from big cities, drive industrial upgrading of cities along the line, and unlock the full economic potential of Jakarta, a megacity of 10 million people.
The Jakarta-Bandung HSR is also expected to drive the development of many industrial parks along the route, promote cross-regional allocation of various resources, create jobs, attract investment, stimulate development of new industries, and produce a spillover effect of economic agglomeration by integrating the markets of Jakarta, Bandung, and neighboring cities.
Jobs will be created
Perhaps the most visible economic effect will be increased employment, said Luo Yongkun. Statistics from China State Railway Group Co., Ltd. (China Railway) showed that construction of the Jakarta-Bandung HSR adopted a Chinese-Indonesian employee ratio of 1:4, which reached 1:7 at the peak, creating a total of 51,000 local jobs.
Furthermore, considering “technology localisation” important, China Railway provided training sessions on skills such as welding, electric engineering, machinery, and concrete pouring attended by 45,000 Indonesian workers.
When put into operation, the railway will bring 30,000 new jobs annually in passenger service, equipment maintenance, and related supporting industries.
Bandung and West Java have the largest domestic tourist market in Indonesia with close to 120 million movements of tourists per year, reported Indonesian Tourism and Creative Economy Minister Sandiaga Uno in an interview with Xinhua News Agency, calling the Jakarta-Bandung HSR a major addition to current infrastructure.
Luo Yongkun also mentioned that the railway will boost lodging, catering, retail, and other tourism-related sectors and create even more job opportunities for Bandung which, as a tourist city, still has considerable potential to be developed.
Homemade Indonesian raw materials such as steel and cement as well as telecommunications, signalling, power, electrical, and machinery equipment were widely used in railway construction, with a total procurement amount of US$5.12 billion.
Wang Kun, head of the Jakarta-Bandung HSR project management department of China Railway, told Global Times that more than 60% of the procurement came from local suppliers, which significantly fuelled the development of the local industrial chain while also introducing China’s experience and equipment capacity to the upstream and downstream contractors in Indonesia.
Luo Yongkun thinks that Chinese efforts to spread high-speed rail technology and experience in Indonesia can help expand infrastructure development eventually, but he stressed that the economic effect of the railroad should be viewed from a long-term perspective.
He identified improving people’s income and consumption level to stimulate economic vitality as most fundamental.
Li Hongchang concurred, predicting that the economic effect of the HSR could take at least five to 10 years to develop.
He forecast an expanded role of the railway as a critical lifeline of the national economy. “This is a gradual process that cannot be achieved overnight,” he noted. “It should align with the economic and social development of Indonesia.”
(Source – ChinaReport ASEAN)
