Indonesia government to take over state firm's stake in troubled China-funded high-speed railway
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- Finance Minister Purbaya Yudhi Sadewa announced at a joint press conference with Danantara on Aug. 5 that a ministry agency will assume the 60% stake in PT KCIC, though the transaction value was not disclosed.
- Danantara COO Dony Oskaria said the takeover will be finalized by mid-September, with the receiving agency responsible for repaying the project's outstanding loan — but without drawing on the state budget.
- The 'Whoosh' high-speed railway spans 142 km connecting Jakarta to Bandung and carries a total project cost of US$7.3 billion, funded largely by China.
- The 60% stake is currently held by a consortium of Indonesian state firms led by PT Kereta Api Indonesia, with PT Wijaya Karya holding a significant share; Danantara already controls all Indonesian state companies.
- Chinese state firms will retain a 40% stake in the project, and Indonesia completed debt renegotiations with China in April, though Dony declined to provide details at that time.
- The project has been plagued by land procurement problems, pandemic-related delays, and ballooning costs since its inception.
Why it matters: Indonesia's government is absorbing the financial risk of a US$7.3 billion megaproject that has consistently missed targets, shifting loan repayment obligations from a consortium of state companies to a finance ministry agency — while leaving Beijing's 40% ownership untouched and preserving its influence over Southeast Asia's flagship Belt and Road rail line.
