Indonesia’s $20 billion Bali LRT raises concerns over heavy reliance on China

Bali’s $20 billion underground rail project promises to boost tourism there, but analysts say it will IndonesiaDependence on Chinese contractors and the cultural and spatial regulations in place on the resort island could pose significant obstacles.

Called Bali City SubwayThe project is being supervised by PT Sarana Bali Dwipa Jaya (SBDJ) while construction will be carried out by local company Indotek and China Railway Construction Corporation (CRCC), the main contractors for the project, and PT Sinar Bali Bina Karya.

“We chose CRCC because it has a reputation as a global rail contractor with experience in building 200,000 km of rail in more than 100 countries,” SBDJ President and CEO Ari Askhara told reporters at the groundbreaking ceremony on September 4, attended by bear, Hindu ritual cleansing the construction site before the laying of the first foundation stone.

The LRT marks another milestone for China’s state-owned enterprises, strengthening their influence in Indonesia’s infrastructure market, particularly in public transport. CRCC was one of the contractors that launched the $7.2 billion Jakarta-Bandung high-speed rail, a flagship project of Indonesia’s Belt and Road Initiative, for commercial use last year.

“This shows the closeness between Indonesia and China, between government and government and between government and businesses,” said Bhima Yudhistira, executive director of the Jakarta-based Center for Economic and Legal Studies, an economic and policy research think tank.