JAKARTA – Indonesia’s government will take over a controlling stake in the company operating a US$7.3 billion (S$9.4 billion) China-funded high-speed railway, its finance minister and a senior official with sovereign wealth fund Danantara said.
Finance Minister Purbaya Yudhi Sadewa said at a joint press conference with Danantara on Aug 5 that he will appoint an agency under his ministry to take over a 60 per cent stake in PT KCIC, the company that operates the bullet train. The value of the stake was not disclosed.
Commercially named “Whoosh”, the 142km railway connects Jakarta to Bandung, a city south-east of the Indonesian capital.
The appointed agency will be responsible for repaying the project’s outstanding loan, but will not use the state budget, Purbaya said.
The transaction will be completed at the latest by mid-September, said Dony Oskaria, chief operating officer of Danantara.
In April, Dony said Indonesia had completed debt negotiations with China for the project, but did not provide details.
The project has been mired in problems, including land procurement issues, pandemic-related delays and ballooning costs.
The 60 per cent stake in KCIC is held by a consortium of Indonesian state companies, led by state railway firm PT Kereta Api Indonesia, with construction firm PT Wijaya Karya holding a significant share.
Chinese state firms will continue to hold a 40 per cent stake in the project.
Danantara controls all Indonesian state firms. REUTERS
