Mastin Annisa and Jeremy J Kingsley – The Jakarta-Bandung High-Speed Rail (KCJB), known as Whoosh, is Southeast Asia's first-ever bullet train.
Intended to symbolise Indonesian national pride when it began operations in October 2023, Whoosh has a speed of 350 kilometres per hour and a massive price tag of over US$7 billion, funded by Chinese state-owned finance providers. Indonesia's Whoosh debt now amounts to US$5.4 billion (75 percent of total project costs), triggering criticism across the country and a corruption investigation.
How we got here
In July 2015, the Indonesian government released its plan to build a high-speed rail connection between two of Indonesia's largest cities, Jakarta and Bandung.
The opposing bids at the time were Japanese and Chinese. After intense lobbying for the contract, China was successful, as it is believed that they offered more relaxed financing arrangements. Additionally, China pledged to work with Indonesian companies to establish joint ventures and transfer technology, which was not offered by Japan.
Whoosh is now managed under a consortium arrangement, called PT Kereta Cepat Indonesia China (KCIC), with sixty percent of the consortium held by PT Pilar Sinergi BUMN Indonesia (PT PSBI), a joint venture company consisting of four Indonesian state-owned companies (BUMN): PT Kereta Api Indonesia (KAI); PT Wijaya Karya (WIKA); PT Jasa Marga; and PT Perkebunan Nusantara VII. The remaining shares in Whoosh are owned by China Railway International, which consists of five companies. China Development Bank was the main financier of the project.
As mentioned, the total cost of the project itself is estimated to be US$7.27 billion or Rp118.37 trillion, including cost overruns of US$1.2 billion. The overrun is the result of a combination of problems, including delays, the COVID-19 pandemic, complications involving land acquisition expenses, rising costs for the construction, and the complexities of negotiations with Chinese lenders.
The China Development Bank covered 75 percent of the initial cost of construction, with the remainder of funds contributed by KCIC. Due to the cost overrun, a further loan was taken out to cover additional costs, but the refinancing attracted a higher annual interest rate of 3.4 percent in comparison to the 2 percent on the initial loan.
Meanwhile, Japan initially offered 0.1 percent interest for a government-to-government loan, but for unexplained, or 'commercial in-confidence, reasons, the Indonesian government chose China despite its much higher interest rate.
Counting the losses
This project financing structure is a central part of the controversy.
Heavy reliance on foreign loans, especially with only a single creditor, means that the project carries concentrated credit risk, and consequently, created a heavy burden on KCIC to meet debt servicing, exacerbated by lower revenues than anticipated.
The situation has got worse, according to PT PSBI, with Whoosh's 2024 operating losses reaching Rp 4.2 trillion (US$258 million), of which KAI was forced to bear Rp 2.23 trillion (US$137 million) due to it being the parent company of PT PSBI.
In the first half of 2025, KCIC also reported a further Rp 1.6 trillion (US$98.3 million) in losses, and KAI was once again forced to shoulder the biggest share, amounting to Rp 951.48 billion (US$58.4 million).
Despite some improvement in the financial outcomes from 2024 to 2025, there has been significant pressure on KAI to manage these losses. Consequently, the Indonesian government is seeking to renegotiate debt arrangements to reduce the financial burden on KAI.
It now seems clear that Whoosh is not on track to become profitable, and there are fears about the ongoing financial burden this project will create for the Indonesian government and state-owned entities.
In August 2025, Danantara, Indonesia's new sovereign wealth fund, which now manages most state-owned enterprises, announced that it was working on a debt restructuring plan for Whoosh.
Luhut Binsar Pandjaitan, the presidential economic advisor who led the bullet train committee from 2021 to 2023, stated that a deal had been reached with Beijing. But Dony Oskaria, Danantara's chief operating officer, said that discussions on a refinancing scheme were still ongoing. These include renegotiating the terms of the finance facility, repayment period, interest rates, and the currency for repayment. Dony added that one alternative to resolve this debt crisis was to hand ownership of Whoosh to the Indonesian government.
Concern has been raised regarding the use of a state budget (APBN) to resolve these financial tensions. Initially, Whoosh was intended to be built and operated without government involvement. Certainly, Purbaya Yudhi Sadewa, the current Finance Minister, has not embraced nationalising Whoosh. During the APBN 2026 Media Gathering on October 10, he noted that the Rp80 trillion in dividends from state-owned businesses that currently flow to Danantara should be used to pay the infrastructure debt, not the state budget.
Sadewa further said that nationalising Whoosh would set a bad precedent for all losses to be borne by the government, while profits go to the private sector.
On the other hand, Indonesian President Prabowo Subianto, during a limited cabinet meeting on the 29th of October, urged ministers and the CEO of Danantara to devise a plan to resolve the Whoosh debt issues by recalculating the debt amount, including the options of extending the loan period and sending a delegation to China to renegotiate the debt.
A model or a warning?
Whoosh is now also the subject of a preliminary corruption investigation by the Komisi Pemberantasan Korupsi (KPK/Corruption Eradication Commission) due to allegations of serious financial and procurement irregularities.
One issue is a per-kilometre construction cost of approximately US$52 million, which far exceeds similar high-speed rail costs in China (US$17-18 million). This was raised publicly by former minister Mahfud MD in mid-October, raising questions about budget inflation or mark-ups.
In addition, the project's large debt burden (about US$7.2-7.3 billion) and the choice of the Chinese tenderer, not the Japanese one, which allegedly increased the loan rate from around 0.1% to about 3.4%, further stoked concerns that the public procurement and financing process may have been compromised.
The KPK has confirmed that the investigation began earlier in 2025 and is still gathering evidence and interviewing stakeholders. No formal suspects having yet been named, but the probe is seen as a test of the KPK's independence and willingness to scrutinise large state projects aligned with legacy political figures.
The Whoosh debt issues highlight the inherent risks of infrastructure megaprojects. It also shows how important proper transparency and corporate governance requirements are, including the proper preparation of feasibility studies, due diligence processes and the implementation of accounting processes for managing foreign finance.
What was intended to be a symbol of modernisation, progress, and innovation, with the ability to connect major cities, has now become a major financial burden for the Indonesian state – and, of course, the public – possibly for generations to come.