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Transportation

Indonesia high-speed rail among $97bn in priority projects

Train line extension faces one-year delay from coronavirus pandemic

Models of high speed trains are displayed at the China High Speed Railway on Fast Track exhibition in Jakarta in 2015.   © Reuters

JAKARTA (Reuters) -- Indonesia plans to extend a high-speed rail project being built with China and bring in Japanese investors, as part of 89 priority projects slated for Southeast Asia's biggest economy over four years, a minister said on Friday.

The extension of the $6 billion Jakarta-Bandung rail project is among 1,422 trillion rupiah ($97.30 billion) of national strategic projects for the 2020-2024 period, Chief Economic Affairs Minister Airlangga Hartarto said.

Such projects usually receive government support such as land-clearing assistance and tax incentives.

The rail project, part of Beijing's Belt and Road Initiative being built by a consortium of Chinese and Indonesian state companies, is facing a one-year delay due to the coronavirus pandemic, Hartarto said.

To ensure it is economically viable, President Joko Widodo has ordered the track be extended to Surabaya, a city about 760 km (472 miles) east of Jakarta, and for Japanese investors to be brought in, the minister said.

China unexpectedly won the Jakarta-Bandung contract in 2015 despite stiff competition from Japan and Indonesian authorities had previously discussed with Japanese authorities a separate Jakarta-Surabaya rail project.

Other projects on the list, include state energy company Pertamina's plan to upgrade its Balongan refinery and transform it into a $12 billion petrochemical complex, Hartarto said, adding it would partner with a unnamed Taiwanese company.

Pertamina in late 2018 signed a framework agreement with Taiwan's CPC Corporation for a joint petrochemical business at an unspecified location worth $6.5 billion.

Major nickel processing projects in the towns of Morowali and Konawe on Sulawesi island and Weda Bay on Halmahera island were also in the priority list, Hartarto said.

The government would also prioritise construction of an industrial estate in Brebes on the island of Java to target companies that are relocating out of China, he said.

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