Analysis: Whoosh or noose: Uncertain future of high-speed rail project

Indonesia's ambitious high-speed rail project, known as Whoosh, has transformed from a symbol of national pride into a potentially fiscal burden. Despite initial assurances that the project would not rely on the state budget, the government has been compelled to provide financial support, signaling a shift in its perception of the initiative.

The project's financial troubles began a decade ago when it was projected to not require state funding. However, the government has since injected Rp 3.2 trillion (US$183 million) capital into the lead company, PT Kereta Api Indonesia (KAI), which holds a 40% stake in the consortium. KAI has absorbed a significant portion of the project's losses, absorbing around Rp 3 trillion from a loss of Rp 5.13 trillion in the first half of 2026 alone.

The project's financial struggles stem from weak revenue and mounting debt. Passenger numbers have fallen short of expectations, averaging 16,000 to 21,000 daily, compared to the projected 60,000. This shortfall complicates the transit-oriented development strategy surrounding the railway. The project's debt has ballooned to approximately Rp 79 trillion (US$4.5 billion), with annual interest payments totaling around US$121 million.

The debt reflects cost overruns that have inflated the project's price from an initial estimate of US$5.5 billion to US$7.27 billion. Moreover, the project's liabilities now exceed its assets, leaving the company with negative equity. This financial deterioration has prompted negotiations between the Indonesian State-Owned Enterprises (SOEs) and the Finance Ministry over managing the project's debt.

President Prabowo Subianto has pledged to resolve Whoosh's financial issues, indicating that the government's involvement in the project is likely to increase.