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KAI asks for government help to alleviate high-speed rail debt burden
Southeast Asia’s first HSR project cost around US$7.3 billion by the time of its completion, leaving state-owned enterprises (SOEs) involved in the project with a liability of $4.55 billion in debt taken out since 2017, plus another $560 million to cover a cost overrun last year, Reuters reported.
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A Whoosh high-speed train on the China-backed railway connecting Jakarta and Bandung is parked at Halim Station in Jakarta, on Oct. 2, 2023. (Reuters/Willy Kurniawan)
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tate-owned railway company Kereta Api Indonesia (KAI) has requested support from the government to repay its debt incurred due to the development of the Jakarta-Bandung high-speed rail (HSR) project.
The company has proposed a variety means to lighten its burden, including an increased state capital injection (PMN), tax waiver and exemption from track access charges, which are fees required to operate conventional trains.
KAI spokesperson Agus Dwinanto Budiadji emphasized the necessity of this support to maintain the firm's operational stability and cashflow, adding that the company had submitted the proposal to the HSR Committee, chaired by Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan.
"We have submitted a proposal to the committee and are still awaiting a decision. We hope the proposal will be accepted, as it will be difficult for us to repay the debt," Agus said on Monday, as quoted by Bisnis.com.
Southeast Asia’s first HSR project cost around US$7.3 billion by the time of its completion, leaving state-owned enterprises (SOEs) involved in the project with a liability of $4.55 billion in debt taken out since 2017, plus another $560 million to cover a cost overrun last year, Reuters reported.
The operator of the 142-kilometer service, called the Whoosh, is expected to face a deficit of Rp 3.15 trillion ($200 million) in its first year of operation, according to a December 2023 financial projection seen by The Jakarta Post.
KCIC, the Sino-Indonesia consortium responsible for the project, as well as KAI and the SOEs Ministry were not available for comment when asked about the figures in January.
