Indonesia to shift controlling stakeholder of China-funded railway next week

Indonesia’s finance minister said on Tuesday the country’s sovereign wealth fund INA, or an agency under his ministry, would next week take ​control of the company that operates a $7.3 billion, China-funded high-speed ‌railway.

Indonesia’s first bullet train, covering 142 km (88 miles) between Jakarta and the city of Bandung, started operations in 2023, eight years after it was awarded to a joint ​venture of Indonesian and Chinese state companies.

Commercially named “Whoosh”, the Belt and ​Road Initiative project has been beset by problems, including ballooning costs. ⁠In 2025, Indonesia began discussions with China to restructure the project’s debt.

Finance Minister ​Purbaya Yudhi Sadewa said last month an agency under the finance ministry would take ​over a 60% stake in the company operating the railway, with Chinese firms retaining 40%.

However, Purbaya said on Tuesday authorities were weighing whether to give the stake to ​the Indonesia Investment Authority (INA) or Sarana Multi Infrastructure (SMI), a development financing arm ​under his ministry.

“Maybe we use SMI and INA, or maybe either one of them,” he ‌told ⁠reporters.

The stake will be handed over on September 15, Purbaya said.

Purbaya did not say whether the current stakeholder, a consortium led by state railway firm Kereta Api Indonesia, would be compensated for the transfer. However, the minister said ​the new controlling ​stakeholder would be ⁠responsible for repaying the project’s outstanding loan.

Following restructuring talks, China agreed to extend the loan’s tenure to 80 years, ​Purbaya said.

The original $4.5 billion loan from China Development Bank ​had a ⁠40-year tenure with a 10-year grace period. Indonesia subsequently took on more loans to cover the project’s cost overruns.

After the handover, the railway will be extended ⁠by ​some 700 km east to the country’s ​second-biggest city of Surabaya, Purbaya said. He did not say how the extension would be funded.

Source: Reuters