Indonesia Takes Over Whoosh High-Speed Rail as Losses Mount to ¥45 Billion

Indonesia’s government will take over a 60% stake in PT KCIC, the company operating the China-funded Whoosh high-speed railway connecting Jakarta and Bandung. Finance Minister Purbaya Yudhi Sadewa announced the decision on August 5 after the project’s losses swelled to approximately ¥45 billion in the first half of 2026, straining state-owned enterprises. The transaction is expected to complete by mid-September 2026.

Why the government stepped in

The Whoosh railway, which opened in October 2023, has become a financial drain on Indonesia’s state firms. The state-owned enterprise consortium holding a 60% stake reported a final loss of approximately ¥45 billion in the first half of 2026, more than triple the prior-year loss. Passenger numbers have stalled, growing only 0.08% year-over-year to 2.94 million riders in the first six months of 2026.

The consortium’s debt has ballooned 13.8% to approximately ¥215 billion since the railway opened. PT Kereta Api Indonesia (KAI), the state railway operator holding 58.53% of the consortium, absorbed roughly ¥30 billion of the losses, cutting its own net profit 74.1% despite a 6.6% rise in revenue.

How the takeover will work

An agency under the Finance Ministry will assume the 60% stake currently held by the state-owned enterprise consortium. The appointed agency will also take responsibility for repaying the project’s outstanding loan, but will not use the state budget, Finance Minister Purbaya said. The specific agency has not yet been named, though the Ministry is considering a special mission vehicle (SMV) under its control.

China’s state firms will retain their 40% stake in the project. The government completed debt negotiations with China in April 2026 but did not disclose the terms. The transaction is targeted for completion by mid-September 2026.

The broader challenge ahead

The Whoosh project has faced persistent obstacles since construction began, including land acquisition delays, pandemic-related setbacks, and cost overruns. The 142-kilometre railway stretches from Jakarta to Bandung, a city southeast of the capital. With passenger demand weak and debt mounting, the government’s takeover signals a shift from private consortium management to direct state control.

The Finance Ministry must now balance debt repayment without drawing on the state budget, likely through project revenues or alternative financing mechanisms. Success depends on boosting ridership and operational efficiency while managing the existing debt burden inherited from the consortium.

Final Thoughts

Indonesia’s government takeover of Whoosh reflects the project’s failure to generate commercial returns despite ¥7.3 billion in investment. The move transfers financial risk from state enterprises to a dedicated government agency, but passenger demand remains the critical unknown.

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