Indonesia government to take over state firm’s stake in troubled China-funded high-speed railway
Commercially named “Whoosh”, the 142km railway connects Jakarta to Bandung.
Jakarta, Indonesia – In a move aimed at resolving the financial troubles of a China-funded high-speed railway project, the government announced plans to take over a 60% stake in PT Kereta Cepat Indonesia China (KCIC). Finance Minister Purbaya Yudhi Sadewa stated at a press conference on August 5th that an agency under his ministry will assume control of the stake, which has not been specified in monetary terms.
The railway, known commercially as "Whoosh," is a 142km line linking Jakarta to Bandung, situated southeast of the capital. The appointed agency will be tasked with repaying the project's outstanding loan, but will not draw from the state budget, according to Minister Sadewa.
Dony Oskaria, CEO of Danantara, the sovereign wealth fund managing the transaction, confirmed that the transfer will be finalized by mid-September. The debt negotiations with China were successfully concluded in April, though specific details were not disclosed at the time. The project has faced numerous challenges, including difficulties in land acquisition, delays caused by the COVID-19 pandemic, and escalating costs.
Currently, a consortium of Indonesian state-owned enterprises, spearheaded by the state railway company PT Kereta Api Indonesia, holds a 60% stake in KCIC. Construction firm PT Wijaya Karya also possesses a significant share. Chinese state-owned entities retain a 40% stake in the railway. Despite these obstacles, the Chinese government continues to maintain its interest in the project. Danantara serves as the overarching entity overseeing all state-owned Indonesian firms.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
