TEMPO.CO, Jakarta - Coordinating Minister for Infrastructure and Regional Development Agus Harimurti Yudhoyono (AHY) announced that Indonesia is preparing a new regulatory framework to support the planned expansion of the Whoosh high-speed rail line connecting Jakarta, Bandung, and eventually Surabaya.
"President Prabowo Subianto has issued a firm directive to extend the Jakarta–Bandung high-speed rail line to Surabaya," AHY said at the 2025 Indonesia Railway Conference in Kemayoran, Jakarta, on July 29, as quoted by Antara.
AHY noted that Prabowo’s directive goes beyond a mere extension of the rail line. He said the vision aims to create faster, cleaner, and more integrated transportation across Java Island.
"The key to this vision lies in strengthening the Bandung–Surabaya corridor," he added.
Background of the High-Speed Rail Project
The high-speed rail initiative began in March 2015 under President Joko Widodo, who discussed it in a limited cabinet meeting. Following approval, the government explored international partnerships, with Japan and China both submitting proposals.
However, in September 2015, Indonesia rejected both offers, citing concerns over using state funds for construction.
A month later, then-Minister for State-Owned Enterprises Rini Soemarno reversed course and chose China as Indonesia’s partner for the project.
The decision sparked public debate but ultimately led to the establishment of a joint venture between Indonesian SOEs and Chinese firms named Kereta Cepat Indonesia Cina (KCIC).
The project was structured on a business-to-business basis, with assurances from the government that it would not be funded by state budgets. Groundbreaking took place on January 21, 2016, with the Jakarta-Bandung line designated as a national strategic project.
Initially targeted for completion in 2019, the project faced multiple delays, pushing the expected finish to 2023.
In March 2021, the government began discussing further expansion of the high-speed rail. A feasibility study was conducted by JICA at the request of former president Susilo Bambang Yudhoyono.
By August 2021, construction was reported to be 77.9 percent complete, although the project had experienced a 23 percent cost overrun, bringing the estimated total to US$6.071 billion.
To address funding issues, President Jokowi issued Presidential Regulation No. 93 of 2021 in October of that year, allowing the government to inject capital and provide guarantees for the Jakarta-Bandung segment.
Mounting Costs and Financial Concerns
According to Anthony Budiawan, Managing Director of Political Economy and Policy Studies (PEPS), the original project cost of US$6.02 billion has ballooned to US$7.22 billion.
Around 75 percent of the investment is financed through loans from the China Development Bank (CDB), resulting in a debt burden of US$5.415 billion, or approximately Rp81.2 trillion.
He added that the annual interest rate on the original loan is 2 percent, while the interest on the cost overrun portion reaches 3.4 percent. This translates to an annual interest payment of about US$120.9 million, or nearly Rp2 trillion.
Government May Take Over Whoosh Infrastructure
One of the major policy considerations on the table is the government's potential takeover of the Jakarta-Bandung high-speed rail infrastructure, currently managed by the KCIC consortium, a partnership between Indonesian SOEs and Chinese companies.
The possible takeover is being considered due to severe cash flow issues, which are projected to persist until at least 2061.
Ticket sales have so far failed to meet expectations. In 2024, only 6.06 million tickets were sold. With an average ticket price of Rp250,000, total gross revenue was estimated at just Rp1.5 trillion, less than the annual interest payments alone.
The low revenue, coupled with rising costs, could push KCIC into a financial deficit. Analysts warn that the company may be forced to take on even more debt to cover the shortfall.
Eiben Heizier, Alif Ilham Fajriadi, and Sukma Kanthi Nurani contributed to the writing of this article.
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