Indonesia Explores PSO Subsidy for Jakarta-Bandung High-Speed Rail

Financial Relief for Whoosh Operation

The Indonesian government is considering implementing a public service obligation (PSO) subsidy for the Jakarta-Bandung High-Speed Rail, known as Whoosh. This potential financial support is aimed at addressing the project's mounting debt and operational challenges. The subsidy is expected to provide immediate relief by potentially reducing operational costs and enabling lower ticket prices, which could subsequently increase passenger numbers and improve revenue generation.

Expert Views on PSO Implementation

Aditya Dwi Laksana, Chairman of the Transportation Forum at MTI, supports the idea of a PSO subsidy for Whoosh. He argues that the subsidy could create a positive financial impact in two ways: first, by allowing for lower ticket prices that would attract more passengers; second, by reducing operational costs, thereby easing the financial strain on the operator, KCIC. According to Aditya, this dual benefit would improve cash flow for KCIC, enhancing their ability to service their debt.

Debate Surrounding PSO for Whoosh

Despite the potential benefits, there's ongoing debate about whether Whoosh should receive PSO support. Aditya points out that PSO subsidies are typically reserved for transportation modes with high societal impact and utilization. As Whoosh is not considered a high-frequency transportation mode for the general public, there's concern that it may not be the most appropriate recipient of such subsidies. The decision to provide PSO support will need to balance the financial health of KCIC against the typical criteria for PSO allocation.

Implications for KCIC's Financial Health

The financial struggles of KCIC, the operator of Whoosh, have been significant. The high-speed rail project, being the first of its kind in Southeast Asia, has faced numerous financial challenges, including substantial debt. The potential PSO subsidy represents a possible lifeline, offering a means to stabilize the company's finances and ensure the project's long-term viability. However, the final decision will depend on a thorough assessment of both the financial and societal benefits of such support.