FOCUS: Indonesia Strains under Debt from China-Led High-Speed Rail

Jakarta, Feb. 17 (Jiji Press)--The Indonesian government is grappling with mounting financial strain from its much-touted high-speed railway project led by China.

Roughly two years after the line began operations in October 2023, ballooning construction costs and weaker-than-expected passenger demand have made debt repayment increasingly onerous. As a result, the government has been forced to inject public funds into the project--an option that was not part of the original plan.

According to local media, Indonesian Minister of State Secretary Prasetyo Hadi revealed on Feb. 10 that the government has decided to use the national budget to help repay the railway project’s debt. Annual expenditures related to the support are expected to reach about 1.2 trillion rupiah, or roughly 11 billion yen.

The high-speed railway, branded as Whoosh, operates at speeds of up to 350 kilometers per hour, covering the 140-kilometer route between Jakarta and Bandung in West Java Province in about 45 minutes. Yet daily ridership remains at less than one-third of the original forecast of 60,000 passengers, largely because fares are higher than those of conventional trains and several stations are located far from city centers.

During President Susilo Bambang Yudhoyono’s tenure (2004-2014), Japan’s Shinkansen bullet train system was considered the leading candidate for Indonesia’s high-speed rail project. However, in 2015, under his successor President Joko Widodo, China secured the contract after asserting that the project would not require any funding from the Indonesian government.

[Copyright The Jiji Press, Ltd.]