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Chinese-led projects hit the skids in Indonesia amid rising distrust
Asia News Network | Publication date 30 September 2019 | 21:08 ICT
Content image - Phnom Penh Post
Indonesia has experienced numerous problems with infrastructure development involving Chinese companies in a wide range of fields. THE YOMIURI SHIMBUN
Indonesia has experienced numerous problems with infrastructure development involving Chinese companies in a wide range of fields, including electricity and transportation. Distrust there is growing, and there are moves to review relations with Chinese firms.
Chinese companies have constructed multiple thermal power plants in Indonesia since the 2000s, taking advantage of low costs. However, in recent years, trouble has been said to regularly occur at these plants, such as difficulties caused by bursting pipes.
A key reason for this seems to be problems with design and construction, including using steel materials with insufficient thickness. “Even when a problem occurs, local workers appear unable to identify the cause,” said a source close to a power plant.
The operating rate of power plants built by Chinese companies therefore remains low.
According to Indonesia’s state-owned utility company Perusahaan Listrik Negara (PLN) and others, there are more than 10 large-scale power plants built by Chinese companies, including the Indramayu power plant in West Java, and they generate a quarter of the total electricity in Indonesia.
However, the operating rate of these power plants, which was originally expected to be around 90 per cent, remains at 50 to 60 per cent, reportedly causing delays in industrial development and blackouts in various parts of the country.
Since last year, PLN has asked the leading Japanese heavy industries company IHI Corp to conduct repairs and inspections. IHI stations an official equivalent to a division head in Indonesia, and has established a system to dispatch engineers there from Japan, Malaysia and other countries.
“Power plants built by Chinese companies were not constructed in accordance with the blueprints, so it’s difficult to repair them,” a source close to IHI said.
Recently, PLN has often excluded Chinese companies from its projects. For example, it only allowed companies from Organisation for Economic Cooperation and Development countries to bid for new power plants and other projects.
There are also problems with road construction projects.
In 2011, a project began to build a 60km expressway connecting Bandung in West Java and Kertajati Airport. According to local media reports, in sections handled by a Chinese company, there are delays in land acquisition and other matters, with little work having been done in some places.
Indonesia’s Public Works and Housing Minister Basuki Hadimuljono sees the delays as a problem, and gave instructions in September to reduce the construction area handled by the Chinese company by about 30 per cent.
The minister said Indonesia should carefully watch the Chinese contractor and make it accelerate its construction, while suggesting that Indonesia would consider measures to deal with other expressway projects that involve Chinese companies.
Work by a Chinese company is also behind schedule to construct a high-speed railway between Jakarta and Bandung. Initially, they aimed to open it this year, but there are currently no prospects for its completion. A high-ranking Indonesian government official said it could open around 2024 if everything goes smoothly.
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