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Resty Woro Yuniar

Indonesia is considering a plan to renegotiate a debt linked to the China-funded Jakarta-Bandung high-speed rail project, as its operator faces a financial “time bomb” due to ticket sales alone being unable to cover the costs of the high-interest loan.
The rail line, known as Whoosh, connects the capital Jakarta with the city of Bandung in West Java in 45 minutes – much shorter than by car, which can take up to three hours.
The US$7.27 billion project has, however, been dogged by controversies since the beginning, including delayed completion and cost overruns. In 2015, former president Joko Widodo chose to partner with China rather than Japan to complete the line amid intense competition between the two countries to secure the project. Jakarta said then that it chose to partner with China due to easier financing provided by Beijing.
Whoosh, Southeast Asia’s first high-speed train, was officially inaugurated in October 2023, but demand so far has not met Jakarta’s expectations while operational costs continue to rise.
The rail line came under fresh scrutiny last month when the head of state-owned PT Kereta Api Indonesia (KAI), Bobby Rasyidin, told lawmakers the railway operator faced a financial problem over Whoosh.
“We are also investigating the [Whoosh] issue; it’s indeed a ticking time bomb. We will coordinate with Danantara to resolve this issue and then improve and restructure the existing portfolios,” Rasyidin said on August 20, referring to Indonesia’s new sovereign wealth fund.
Whoosh is operated by PT Kereta Cepat Indonesia China (KCIC), a joint venture involving Indonesian and Chinese state-owned firms. The Indonesian side, PT Pilar Sinergi BUMN Indonesia (PSBI), controls 60 per cent of KCIC’s stocks, while the Chinese side owns the rest.
KAI owns nearly 60 per cent of PSBI, which also includes construction firm Wijaya Karya, highway operator Jasa Marga and plantation company Perkebunan Nusantara VIII.
Three-quarters of Whoosh’s initial budget, or US$6.02 billion, was financed by a loan from China Development Bank, with an annual interest rate of 2 per cent, while the KCIC funded the rest. The project was marred by cost overruns of US$1.2 billion, largely caused by the Covid pandemic and a sluggish land acquisition process.


To finish the project, Jakarta eventually agreed to a Chinese loan to cover the overrun, with an interest rate of 3.4 per cent.
As the largest shareholder in PSBI, KAI bears the heaviest burden from Whoosh’s financial problems. In 2024, PSBI recorded losses of 4.19 trillion rupiah (US$251.5 million), of which 2.24 trillion rupiah was carried by KAI, according to KAI’s unaudited financial report released on June 30.
PSBI recorded 1.625 trillion rupiah (US$97.5 million) in losses in the first six months of this year, translating into 1.26 trillion rupiah losses for KAI, the report showed. Statistics agency BPS reported that Whoosh sold 6.06 million tickets last year, far fewer than the government’s annual target of 31 million.
The losses incurred by KAI from Whoosh were the largest compared with losses related to the operations of other railways, including Light Rail Transit in the Greater Jakarta area and the airport line. Most of the losses were tied to the payment of Whoosh’s debt interest, as well as a shortfall of cash, as revenues were not enough to cover interest or debt instalments.
The KAI’s financial report prompted Jakarta to react.
“We will renegotiate Whoosh’s debt, but this is the task of other ministries,” Erick Thohir, then minister of state-owned enterprises, told reporters on September 15. He added that the state would pay for costs relating to Whoosh’s infrastructure, while KAI would finance Whoosh’s day-to-day operations.
The debt issues should be resolved before the extension of the Jakarta-Bandung line all the way to Surabaya in East Java, said Erick, who became minister of youth and sports on September 17.
Danantara has previously proposed that the state take over Whoosh’s infrastructure-related debt, which amounted to US$6.7 billion.
The [railway] can continue, and financial sustainability can also be achieved.
Toto Pranoto, University of Indonesia academic
“We’re currently evaluating [Whoosh debt] and we want to ensure it’s feasible. If we take corporate action, we want it to be thorough, not just postponing the problem,” Rosan Roeslani, Danantara’s chief executive, said last month.
Toto Pranoto, a state-owned companies expert at the University of Indonesia, said that the Indonesian government should carry the burden of the infrastructure debt to prevent “the collapse of KAI”.
“According to the 2007 Railway Law, the government is responsible for railway infrastructure. If the infrastructure [debt] burden is now placed on KAI, it will undoubtedly fall apart, as the value is enormous,” Toto said.
“It would be better if Danantara [achieves] debt-restructuring by negotiating with creditors, or by taking diplomatic steps with the Chinese government, using a government-to-government approach. The [railway] can continue, and financial sustainability can also be achieved.”
Anthony Budiawan, managing director of think tank Political Economy and Policy Studies, said it was hard to predict whether Whoosh would be financially sustainable after the debt restructuring, as the settlement scheme was currently “unclear”.
“It is impossible for China to be willing to renegotiate or reduce the debt unless the interest rate on the loan is the one being renegotiated. Right now, it’s not clear what the [Indonesian] government means by renegotiation,” Budiawan said.

Unpopular Whoosh?
According to Budiawan’s estimation, the annual repayment from the debt’s interest rate alone is “very high”, at US$120.9 million, while ticket sales last year, averaging at 250,000 rupiah (US$15) apiece, could only yield an income of 1.5 trillion rupiah.
KCIC has said that it will boost ticket sales through dynamic pricing implementation, increasing sales of Frequent Whoosher cards for regular users, enhancing group service, and partnering with travel agencies and other transport operators. Other avenues being explored include naming rights to stations, renting spaces for retailers and advertisers.
Toto said that ticket sales were lacklustre as there were other, cheaper alternatives to Whoosh connecting Jakarta and Bandung.
“Especially considering the cost, which is only affordable for the upper middle class. It’s been proven that the occupancy rate is only 40 per cent, meaning that for upper-class passengers, the distance is too short, and for lower-class passengers, the price is unreasonable,” Toto said.
“Extending the route to Surabaya makes more economic sense. People could divert their capital from air travel to high-speed trains. That is more feasible.”


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A train of the Jakarta-Bandung high-speed railway, locally known as Whoosh, leaving a station in Bandung in May. Photo: Xinhua

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Demand for Whoosh, Southeast Asia’s first high-speed train, has not met Jakarta’s expectations since it started operations in 2023


Demand for Whoosh, Southeast Asia’s first high-speed train, has not met Jakarta’s expectations since it started operations in 2023.


Indonesia seeks to rework China-funded high-speed rail’s debt

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Demand for Whoosh, Southeast Asia’s first high-speed train, has not met Jakarta’s expectations since it started operations in 2023

Demand for Whoosh, Southeast Asia’s first high-speed train, has not met Jakarta’s expectations since it started operations in 2023