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KCIC responds to WIKA's claims of losses on Whoosh bullet train project

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Tempo - July 17, 2024

Ilona Estherina, Jakarta – The management of PT Kereta Cepat Indonesia-China (KCIC) addressed recent statements made by PT Wijaya Karya Tbk (WIKA), the state-owned construction company, regarding financial losses attributed to the Whoosh or Jakarta-Bandung High-Speed Train Project.

Eva Chairunisa, PT KCIC Corporate Secretary, emphasized that the entire construction process was meticulously planned. "The Whoosh project has been carefully considered from various aspects and coordinated with all stakeholders involved," she said in an official statement on Tuesday, July 16, 2024.

She reiterated that the high-speed train's primary objective is to enhance Indonesia's transportation system. The project is expected to improve connectivity and boost the economy between Jakarta and Bandung by providing a modern and environmentally friendly mass transportation option.

Regarding WIKA's claims of trillions of capital contributions, KCIC maintained that all financial processes are conducted according to established procedures. "We can assure you that all billing at KCIC undergoes proper administrative steps so that everything can be properly accounted for," she stressed, adding that this includes rigorous adherence to good corporate governance practices, particularly on the financial side.

Eva further highlighted the ongoing progress of Whoosh. The bullet train operations have steadily increased, with regular trips rising from 14 per day in October 2023 to 48 per day as of May 2024. At the beginning of 2025, the daily train trip is targeted to reach 62.

As previously reported, WIKA's President Director, Agung Budi Waskito, cited the high-speed train project as a contributing factor to the company's financial losses. While acknowledging the impact of high-interest expenses on WIKA's overall performance in 2023, Waskito attributed a significant portion of the losses to PT Pilar Sinergi BUMN Indonesia (PSBI).

PSBI, a subsidiary of PT Kereta Api Indonesia (KAI), holds the majority share at 60% of PT KCIC. WIKA, however, maintains a 38% stake in PSBI. Waskito explained that the company's losses stemmed from investments made in the high-speed train project, necessitating the issuance of bonds, which further burdened their finances. Agung claimed that WIKA had already disbursed Rp6.1 trillion for the project.

"There is also an additional Rp5 trillion that remains disputed (unpaid), so it's nearly Rp12 million" Waskito revealed during a meeting with the House of Representatives (DPR) Commission VI on Monday, July 8, 2024.

WIKA reportedly recorded a net loss of Rp7.12 trillion in 2023, which is a significant increase of 11,860% compared to the Rp59.59 billion loss reported in the previous year.

Source: https://en.tempo.co/read/1892403/kcic-responds-to-wikas-claims-of-losses-on-whoosh-bullet-train-projec

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