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Of the total $6 billion cost, China’s Development Bank will provide a $4.5 billion loan at 2 percent interest, according a project prospectus seen by Reuters. The remaining 25 percent of the project cost will be funded by equity provided by the consortium. The loan will have no sovereign guarantees, which are among the most controversial parts of Belt and Road projects, as they shift risk onto the governments of partner countries. Beijing lobbied hard against Tokyo in 2015 to win the Indonesian project as a way to showcase its high-speed rail expertise to international customers letter o cufflinks.
“China wanted to deliberately show that its fast train was better than Japan .. we asked for the lowest rate possible and they gave 2 percent,” Rini Soemarno, Indonesia’s minister for state-owned enterprises, told reporters earlier this year. The railway’s financial terms came under debate during April’s presidential election between Indonesian President Joko Widodo and challenger Prabowo Subianto, who pledged to review the project if he pulled off a victory. While the results are still to be officially confirmed, sample vote counts by independent pollsters show Widodo to be headed for a second term letter o cufflinks.
At the project site, there seem to be no doubts that it will be completed letter o cufflinks. Deep in Indonesia’s tea country, workers are directing drilling machines into a hillside, displacing red earth to carve out two tunnels that will lead to the station of Wallini, a tea plantation near Bandung. Chinese workers there told Reuters they had been at the site for a year and expected to stay until the project’s completion in 2021. Four new satellite towns will be built by the train consortium along the route..
Widodo’s government is currently offering up to $91 billion in infrastructure projects to Chinese companies, according to Luhut Pandjaitan, the coordinating minister for maritime affairs, who said Chinese officials have toured regional governments in search of projects to fund. Two top officials told Reuters Widodo intends to lead a delegation to the Belt and Road forum, where some of those projects are expected to be signed. One of the officials, Indonesia’s investment board chief, Thomas Lembong, told Reuters he expected this week’s summit to be a turning point, a “Belt and Road 2.0” with China more willing to negotiate letter o cufflinks.
“The Chinese leadership will do whatever it takes to make Belt and Road a success, even if that means making it more professionalised, transparent, and more cooperative,” he said. The revival of the Malaysian project is likely to give China hope of securing another train project: the high speed rail (HSR) between Kuala Lumpur and Singapore, which was postponed by Mahathir after he initially threatened to cancel it letter o cufflinks. “China will likely take heart from the ECRL outcome and focus their efforts on ensuring that the Kuala Lumpur-Singapore HSR remains on track,” Harrison Cheng, an analyst at Control Risks, told Reuters..