Indonesian Government Explores Subsidies for Jakarta-Bandung High-Speed Rail

Financial Challenges and Potential Solutions

The Indonesian government is actively considering providing subsidies for the operational costs of the Jakarta-Bandung high-speed rail, known as Whoosh ¹

. This decision comes as the project faces significant financial challenges. The high-speed rail is managed by PT Kereta Cepat Indonesia China (KCIC), a consortium involving Indonesian state-owned enterprises and Chinese investors ²

Source 2

https://finance.detik.com/infrastruktur/d-8196052/rosan-ungkap-peluang-kereta-cepat-disubsidi-pemerintah

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Rosan Roeslani, CEO of Badan Pengelola Investasi Daya Anagata Nusantara (BPI Danantara), stated that the government is open to subsidizing the project through a Public Service Obligation (PSO) scheme ¹

. This approach would involve the government covering certain operational costs, recognizing the project's role as a mass transportation system.

Debt Discussions and Financing Schemes

Coordinating Minister for Economic Affairs Airlangga Hartarto confirmed that the project's debt is being discussed across various ministries, with potential solutions involving Danantara ²

. The project's funding structure includes approximately 75% loan from China Development Bank (CDB) and 25% equity from the consortium ²

Source 2

https://finance.detik.com/infrastruktur/d-8196052/rosan-ungkap-peluang-kereta-cepat-disubsidi-pemerintah

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The government is exploring various corporate financing schemes to address the project's financial challenges. Airlangga Hartarto indicated that the solution could involve multiple approaches, without confirming whether the State Budget (APBN) would be used ²

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Implications and Future Directions

The potential subsidy reflects the government's commitment to supporting major infrastructure projects despite financial challenges. As a mass transportation system, the Whoosh project is seen as a critical component of Indonesia's transportation infrastructure. The government's involvement through PSO or other schemes could help ensure the project's long-term viability.