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The Indonesian government will acquire the majority stake held by state-owned construction company PT Wijaya Karya (PT Wika) in the operator of the Jakarta–Bandung high-speed railway, as part of efforts to address the company's mounting financial liabilities without placing additional pressure on the national budget. The transaction will increase the government's ownership in PT Kereta Cepat Indonesia China (KCIC), which operates the country's first high-speed rail service, Whoosh. Officials said the move is intended to strengthen financial oversight of the project, which has faced cost overruns, land acquisition challenges, pandemic-related delays and ballooning debt since construction began. The railway was jointly developed by Indonesian and Chinese partners under China's Belt and Road Initiative.
The Indonesian government has decided to acquire the majority stake held by state-owned construction company PT Wijaya Karya (PT Wika) in PT Kereta Cepat Indonesia China (KCIC), the operator of the Jakarta–Bandung high-speed railway, in a move aimed at managing the company's financial obligations while preserving fiscal stability.
Finance Minister Sri Mulyani Indrawati announced the decision during a joint press conference with State-Owned Enterprises Minister Dony Oskaria, stating that the government would purchase 60 per cent of PT Wika's stake in PT KCIC. The transaction will increase the government's ownership in the railway operator, which manages the Whoosh high-speed rail service connecting Jakarta and Bandung over a distance of 142 kilometres (88 miles).
According to the finance minister, the acquisition will provide financial support for repaying the project's outstanding debt without creating additional pressure on the state budget. Dony Oskaria said the transaction would be completed by the Ministry of State-Owned Enterprises.
Although the ministers announced the government's decision, financial details of the transaction were not disclosed. Earlier this year, Dony Oskaria had indicated that discussions with Chinese stakeholders regarding the project were underway, though no further information was provided at the time.
The Jakarta–Bandung high-speed railway has experienced several challenges since construction commenced, including land acquisition issues, pandemic-related delays and significant cost overruns, resulting in an increase in project debt.
The railway was developed through a joint venture in which PT Kereta Api Indonesia (KAI) leads a consortium of Indonesian state-owned enterprises holding 60 per cent of the project, while a consortium of Chinese state-owned companies owns the remaining 40 per cent.
The government's decision reflects its intention to stabilise the financial structure of one of Indonesia's largest infrastructure projects while ensuring the continued operation of the country's first high-speed rail network.
Source - Reuters
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