The government has agreed with Indonesia to conduct next year its first feasibility study on introducing Japan's bullet train technology to the Southeast Asian country, according to a source close to the negotiations.
The envisioned study puts Japan a big step ahead of rivals including China and South Korea, and brings it closer to winning the contract, the source said.
Japan has been pushing strongly for its technology and expertise to be applied abroad in making infrastructure more efficient, including by building high-speed railway systems.
The Indonesian railway construction project is worth 50 trillion rupiah (about ¥450 billion), according to the source.
The Japan International Cooperation Agency will conduct a three-year study in connection with Indonesia's plan to build a high-speed railway system on Java Island, and was expected to sign a memorandum with the Indonesian government on Thursday at the earliest, the source said.
The study will look into costs and passenger demand, and ways to secure funding for the roughly 150-km route connecting the Indonesian capital, Jakarta, to Bandung, the source said.
JICA will likely consider the prospect of operating an additional route from Bandung to Surabaya in eastern Java.
With Indonesia and other Asian economies keen to build high-speed railway links, the business opportunity for Japan is large as the combined potential routes will surpass 8,000 km, far larger than Japan's bullet train network covering 2,400 km, industry watchers said.
In 2011, Indonesia announced its vision to create a high-speed rail linking Jakarta and Surabaya, a center of commerce, to stimulate the country's economy.
Traveling at a maximum speed of 300 kph, the projected rail link would transport people over an estimated 730-km stretch in about three hours.