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Whoosh faces hefty deficit in first year of operation
Kereta Cepat Indonesia China (KCIC), the consortium responsible for the project, is seeking to close the gap through what it calls cash deficiency support (CDS), which experts say will most likely come from bank loans.
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A group of visitors take pictures in front of a train operating on the Jakarta-Bandung high-speed railway, also known as Whoosh, before it departs from Halim station in Jakarta on Nov. 22, 2023. (JP/Ruth Dea Juwita)
T
he Jakarta-Bandung high-speed railway, dubbed Whoosh, is expected to face a deficit of Rp 3.15 trillion (US$200 million) in its first year of operation, according to a December 2023 financial projection seen by The Jakarta Post.
The projection also shows that Kereta Cepat Indonesia China (KCIC), the consortium responsible for the project, is seeking to close the gap through what it calls cash deficiency support (CDS), which experts say will most likely come from bank loans.
Analysts say the deficit may continue for decades and will likely affect the state-owned enterprises (SOEs) behind the project, particularly national railway firm Kereta Api Indonesia (KAI), which holds the largest stake in the railway on the Indonesian side.
This year, KCIC expects to book Rp 2 trillion in revenue, more than 95 percent of which it projects will come from ticket sales. But it will need to spend Rp 3.32 trillion to operate the service and another Rp 1.84 trillion to pay down loan interest and meet its tax obligations, according to the financial document.
The railway hit the milestone of serving 1 million passengers late last year.
To ensure it has sufficient cashflow this year, KCIC will require Rp 3.4 trillion in CDS, the document also shows.
Deputy SOEs Minister Kartika Wirjoatmodjo said in 2021 that the government had proposed bridging the cashflow gap with additional loans from Beijing-owned China Development Bank. The loans would be guaranteed by the Indonesian government through KAI, a move made possible by a 2023 Finance Ministry regulation.
