Prabowo Wants to Extend Whoosh High-Speed Rail by 1,000km
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Indonesia’s high-Speed Rail Project “Whoosh” Faces Scrutiny Over Costs and Contract Transfer
Table of Contents
Overview
Indonesia’s recently launched high-speed railway, known as “Whoosh” (officially the Jakarta-Bandung High-Speed Railway), is under examination by the Corruption Eradication Commission (KPK) amid concerns over inflated construction costs and a controversial contract transfer from Japan to China. The project, a key infrastructure initiative under President Joko Widodo, has become a focal point of political debate and scrutiny as Indonesia prepares for its 2024 elections.
Project Details and Stakeholders
The Whoosh railway connects Jakarta and Bandung, two major cities in West java. The project involves multiple Indonesian government ministries and a Chinese financing component. Key stakeholders include:
- Transportation Ministry: Responsible for the overall advancement and operation of the railway.
- Finance Ministry: Manages the financial aspects of the project, including loan agreements and debt restructuring.
- Office of the Coordinating Economy Minister: Coordinates economic policy related to the project.
- Danantara: A company involved in the project, though its specific role isn’t detailed in the source material.
- Chinese Government/Lenders: Provided the primary financing for the project.
- PT Kereta Cepat Indonesia-China (KCIC): The joint venture company operating the Whoosh railway [KCIC Website](https://kcic.co.id/).
According to reporting by The Jakarta Post,these entities agreed to share duty for the project while the Indonesian government negotiates debt restructuring with the Chinese side.
Cost Concerns and Allegations of Inflation
Former coordinating Minister for Political, legal, and Security Affairs, Mahfud MD, publicly raised concerns about the project’s cost, alleging meaningful discrepancies compared to similar projects in China. He claimed the construction cost reached US$52 million per kilometer, a figure three times higher than the US$17-18 million per kilometer cost in China. Mahfud questioned where the additional funds were allocated.
mahfud’s statements, made in a podcast on October 14, 2024, prompted the KPK to initiate a data collection and preliminary investigation process, beginning in early 2025.
contract Transfer and Loan Interest Rates
A central point of contention is the transfer of the project contract from Japan to China in 2015-2016. Mahfud MD alleges this transfer resulted in a ample increase in the loan interest rate, jumping from 0.1% offered by Japan to 3.4% under the Chinese contract. This increase, he argues, significantly increased the project’s overall financing burden.
Mahfud, a vice-presidential candidate in the 2024 Indonesian election, urged the KPK to investigate those involved in the contract transfer.He maintains that law enforcement can investigate potential crimes even without a formal report and stated his willingness to cooperate with any KPK summons.
Government Response and Financial Capacity
Defense Minister Prabowo Subianto asserted that Indonesia possesses sufficient financial capacity to maintain Whoosh’s operations without negatively impacting the state budget, as reported by Antara news agency on Tuesday, November 5, 2024. He expressed confidence in the government’s ability to support the project and serve the Indonesian people.
“There’s no need to worry. We will continue to serve and fight for the people,”