State-owned construction company PT Wijaya Karya (Persero) Tbk (WIKA) has added capital injection of IDR 6.12 trillion for the ongoing construction of the Jakarta-Bandung High-Speed Railway Project – a joint project by PT Kereta Cepat Indonesia-China (KCIC) and PT Pilar Sinergi BUMN Indonesia (PSBI).
WIKA was established in 1960 in Jakarta. The company had existed during the Dutch colonial era under the name of NV Technische Handel Maatschappij en Bouwbedrijf Vis en Co. (NV Vis en Co.). Agung Budi Waskito has served as the company’s CEO since 2020.
Rapid Railway Project
The capital injection is equivalent to 35.11% of WIKA’s equity of IDR 17.44 trillion as of June 2022. The fund was used to establish synergy in building the much delayed high-speed railway project.
WIKA Corporate Secretary Mahendra Vijaya said on November 21, 2022, that the extra capital was used as part of a conversion of the advanced capital payment to the actual capital investment of IDR 6.10 trillion and cash investment of IDR 11.51 billion.
The KCIC is a joint venture between PSBI and Beijing Yawan HSR Co., Ltd. (China Railway International Co., Ltd.). PSBI owns the company with a 60% share.
The high-speed line – a landmark project under the China-proposed Belt and Road Initiative – connects Indonesia’s capital Jakarta and West Java capital of Bandung. With a design speed of 350 kilometers per hour, the railway will cut the journey between both cities from over three hours to around 40 minutes, Xinhua reported.
China President Xi Jinping and President Joko “Jokowi” Widodo had been slated to attend the high-speed train trial prior to the G20 Summit in Bali on November 15-16, 2022. However, due to both leaders’ tight schedule, they cancelled their attendance.
PSBI shareholders consist of WIKA (38% of the capital of IDR 4.5 billion), toll road operator PT Jasa Marga (Persero) Tbk (12%), as well as PT Kereta Api Indonesia (KAI) and PT Perkebunan Nusantara (PTPN) (Persero) VII (25% combined). Thus, with the realization of capital and cash investment, the structure of the ownership changes. WIKA gained 39.11% of the total capital of IDR 15.65 trillion, while KAI with 51.38%, Jasa Marga with 30%, and PTPN VII with 1.21%.
Risk in railway infrastructure
Railway mode is very susceptible to geographic heterogeneity such as gradients and turns. Rail transport supports a slope of only 4% or 40 meters per kilometer. Meanwhile freight trains do not tolerate more than 1%.
The geographical condition of West Java, with volcanoes and faults, is prone to natural disasters, especially earthquakes. One of the highlights is the Lembang Fault, which stretches for 29 kilometers to the north of Bandung.
A 5.6 Richter scale quake shook Cianjur, a city located 65-kilometer away from Bandung, on November 21, 2022. A total of 162 people died while hundreds were injured. Authorities feared the number of fatalities might rise in coming days.
