Indonesia to take over state firm’s stake in troubled China-funded high-speed railway

The Story in Brief

Indonesia’s government will take a controlling stake in the company that operates the $7.3 billion China‑funded high‑speed railway linking Jakarta and Bandung, officials said. Finance Minister Purbaya Yudhi Sadewa told a joint press conference with sovereign wealth fund Danantara that he will appoint an agency under his ministry to acquire a 60% stake in PT KCIC, commercially named “Whoosh”. The value of the stake was not disclosed. Chinese state firms will retain a 40% ownership in the venture.

The appointed agency will be responsible for repaying the project’s outstanding loan but will not use the state budget, according to Purbaya. Dony Oskaria, chief operating officer of Danantara, said the transaction will be completed by mid‑September at the latest. Dony had earlier said debt negotiations with China were complete without providing details. The 142‑kilometre project has faced land procurement problems, pandemic‑related delays and rising costs. The current 60% stake is held by a consortium of Indonesian state firms led by PT Kereta Api Indonesia, with PT Wijaya Karya a significant shareholder; Danantara controls all Indonesian state firms.

The Indian Opinion

The reporting is factual and centred on officials’ statements, but several important details remain thin. The article quotes commitments that the state budget will not be used and gives a target completion date, yet it does not provide the valuation of the stake, the terms of the loan transfer, or how contingent liabilities may be managed. Readers should note that assertions about off‑budget repayment reduce immediate fiscal transparency, even if they avoid direct budgetary outlay. It is also relevant that Chinese partners will retain 40% of PT KCIC, so the project remains a joint venture. Until the transaction documents or debt terms are published, uncertainties about costs and future financial exposure persist.

Original article: Indonesia government to take over state firm’s stake in troubled China-funded high-speed railway (IndiaTimes)

This story was summarised and commented on by AI from the source linked above.