Indonesia’s government is set to take control of a 60 per cent stake in the company operating the country’s $7.3 billion China-funded high-speed railway, known commercially as Whoosh.
Finance Minister Purbaya Yudhi Sadewa had said the government would appoint an agency under his ministry to acquire the controlling stake in KCIC, the company that operates the 142-kilometre Jakarta-Bandung railway.
The value of the transaction was not disclosed, but Danantara Chief Operating Officer Dony Oskaria said the takeover is expected to be completed by mid-September.
The government agency taking over the stake will also assume responsibility for repaying the railway’s outstanding debt. However, Purbaya said the repayments would not be funded through the state budget.
The 60 per cent stake is currently held by a consortium of Indonesian state-owned companies, led by national railway operator Kereta Api Indonesia, with construction company Wijaya Karya also holding a significant interest.
Chinese state-owned companies will retain the remaining 40 per cent stake in KCIC.
The Jakarta-Bandung high-speed railway has faced several challenges since its development, including land acquisition disputes, delays caused by the COVID-19 pandemic and rising construction costs.
The project, Indonesia’s first high-speed railway, was developed with Chinese financing and has been the subject of concerns over its debt burden.
Source said the planned takeover follows Indonesia’s completion of negotiations with China on restructuring the project’s debt.
