Indonesia govt to take over state firm’s stake in troubled China-funded high-speed railway
JAKARTA: Indonesia’s government will take over a controlling stake in the company operating a USD7.3 billion China-funded high-speed railway, its finance minister and a senior official with sovereign wealth fund Danantara said. Here are the details: Finance Minister Purbaya Yudhi Sadewa said at a joint press conference with Danantara on Wednesday that he will appoint an agency under his ministry…
The Indonesian government plans to assume a controlling 60 percent stake in PT KCIC, the operator of a USD7.3 billion high-speed railway funded by China, according to Finance Minister Purbaya Yudhi Sadewa and Danantara, a sovereign wealth fund. The railway, known commercially as "Whoosh," spans 142 kilometers between Jakarta and Bandung.
The agency under the finance ministry responsible for the takeover will be tasked with repaying the project's outstanding loan, without drawing from the state budget, as confirmed by Sadewa. Danantara's COO, Dony Oskaria, stated that the transaction will be finalized by mid-September.
The project has faced numerous challenges, including difficulties with land acquisition, pandemic-related delays, and escalating costs. Currently, a consortium of Indonesian state companies, led by the state railway firm PT Kereta Api Indonesia, holds a 60 percent stake in PT KCIC, while construction firm PT Wijaya Karya owns a significant share. Chinese state entities retain a 40 percent stake in the project.
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