Published on August 8, 2025 by TEMPO
by Han Revanda Putra
Danantara will restructure the debt on the Jakarta-Bandung high-speed rail project, also known as Whoosh. It faces a dilemma between commercial and political mandates.
Indonesian sovereign wealth fund Daya Anagata Nusantara, or Danantara, plans to restructure the Jakarta-Bandung high-speed rail project debt. This restructuring, or change in payment procedures and debt repayment scheme, is one of Danantara’s programs in its 2025 Corporate Work Plan and Budget.
Investment and Downstream Minister/head of the Investment Coordinating Board (BKPM) Rosan Roeslani said he is evaluating this restructuring step. He wants to make sure that such corporate action could resolve the problem completely instead of merely postponing it.
“When the time comes, we will announce the steps to restructure the debt,” he said at the Coordinating Ministry for Economic Affairs office on Tuesday, August 5, 2025.
The rescue plan for the Whoosh project was also mentioned by Danantara’s Chief Operating Officer, Dony Oskaria, in a hearing with Commission VI of the House of Representatives on July 23, 2025. Dony said Danantara is formulating alternative options to resolve PT Kereta Cepat Indonesia China (KCIC)’s debts, the operator of the Jakarta-Bandung high-speed rail.
According to Dony, the plan has to be comprehensive without disturbing PT Kereta Api Indonesia (Persero)’s operations, the head of the Indonesian consortium in KCIC.
“We are looking for a long-term solution to this consortium’s sizeable debt,” he said.
A document from PT Danantara Asset Management (Persero) lists high-speed rail debt settlement as one of Danantara’s planned restructuring projects. In addition to high-speed rail debt settlement, the restructuring program also targets troubled state-owned airlines, steel mills, and state-owned insurance companies.
The document states that the high-speed rail infrastructure is currently being borne by PT Pilar Sinergi BUMN Indonesia (PSBI), a consortium of state-owned enterprises, and the Beijing Yawan HSR consortium from China. The total cash flow shortfall is significant until 2061.
“The step that will be taken is a policy of taking over the high-speed rail infrastructure by the government,” the document states.
The high-speed rail project, which was launched commercially in October 2023, is being developed under a joint venture scheme with 40 percent Chinese and 60 percent Indonesian capital. From Indonesia, funding is held by the PSBI consortium, consisting of PT Kereta Api Indonesia (Persero) with a 51.37 percent stake, PT Wijaya Karya (Persero) Tbk with 39.12 percent, PT Perkebunan Nusantara I with 1.21 percent, and PT Jasa Marga (Persero) Tbk with 8.30 percent.
The Beijing Yawan HSR shareholders are CREC with 42.88 percent, Sinohydro with 30 percent, CRRC with 12 percent, CRSC with 10.12 percent, and CRIC with 5 percent. China initially offered US$5.5 billion (approximately Rp 89.6 trillion) for the high-speed rail project.
The project cost then ballooned to US$6.071 billion (Rp 98.9 trillion) in 2018 due to construction changes at several locations.
When Whoosh began operations in 2023, China and Indonesia agreed to a US$1.2 billion cost overrun. This means the project cost will be US$7.27 billion, equivalent to Rp 118.4 trillion.
The Indonesian and Chinese governments agreed that 75 percent of the cost overrun will be covered by a new loan from the China Development Bank (CDB) and 25 percent by KCIC’s equity. Equity funding will be provided through a Rp 7.5 trillion state equity injection into KAI, the consortium leader.
Danantara’s plan to restructure the high-speed rail debt, according to Bhima Yudhistira, Executive Director of the Center of Economic and Law Studies, has left the state-owned enterprise holding company in a bind. Instead of stimulating economic growth or financing energy transition projects, Bhima said, Danantara is busy resolving the ailing state-owned enterprise’s financial problems.
Funds collected from state-owned enterprise dividend payments and new loans will only be used for problematic projects. “There are risks to Danantara,” he said on Thursday, August 7, 2025.
Not only Danantara’s finances, but also the state budget are at risk. Bhima stated that non-tax state revenues would fall by 24 percent annually by May 2025. This decline was partly due to Danantara. The state budget had allowed SOE dividends to be managed by Danantara. “But it turns out the dividends were used to restructure the high-speed train debt,” he said.
Furthermore, designating the project for restructuring without public participation opens up the possibility of moral hazard. According to Bhima, the high-speed train’s problems have been present since its planning. These issues should be the responsibility of the government, the Indonesian consortium, and the Chinese company.
Instead of digging into additional funds to patch up the debt, Bhima proposed that Danantara lobby China for a reduction. Possible options include interest reductions or debt swaps, and debt cancellation. In exchange, Danantara could collaborate with China to develop energy transition projects.
As a sovereign wealth fund, according to M. Rizal Taufikurahman, Head of the Center for Macroeconomics and Finance at the Institute for Development of Economics and Finance, Danantara should manage productive assets, not bail out debt from projects at risk of default.
The Whoosh debt restructuring will place Danantara in a difficult position, balancing its commercial mandate with political burdens. “This is not just a financial transaction, but also a compromise on the strength of inter-agency coordination, weak accountability, and the absence of performance-based evaluation in large-scale infrastructure projects,” he said on Thursday, August 7, 2025.
The debt restructuring effort has also drawn criticism because the interest rates to be paid to the CDB, at 2 percent and 3.4 percent, are lower than Danantara’s cost of capital. Therefore, according to Anthony Budiawan, Managing Director of Political Economy and Policy Studies, the restructuring is tantamount to taking on new debt with higher interest rates than the CDB’s interest rate. “It could result in financial losses for Danantara, which ultimately translate into state financial losses,” he said on Thursday, August 7, 2025.
KCIC General Manager Corporate Secretary Eva Chairunisa told Tempo that coordination was carried out with representatives of the Chinese government, one of whom is Beijing Yawan, which holds 40 percent of KCIC shares.
“Therefore, the restructuring will definitely be discussed and agreed upon by both parties,” he said on Thursday, August 7, 2025.
Regarding the restructuring options and scheme, Eva stated that no decision has been made yet. However, the Indonesian and Chinese governments have agreed to maintain Whoosh’s operational continuity and service quality to the public.
KAI Vice President of Public Relations Anne Purba stated that the high-speed train restructuring plan is currently under review and coordination between KAI, PSBI, KCIC, and relevant stakeholders, particularly Danantara and the Ministry of State-Owned Enterprises.
The review covers legal, institutional, financial, tax, and risk aspects. She hopes this study will produce the best option, which will then be decided by the government. “The goal of this restructuring plan is to maintain the operational continuity of the high-speed train and its overall financial sustainability,” she told Tempo on August 7, 2025.