High-Speed Railway Financing Negotiation in Final Stage

By Editorial Team 23/08/2022
Kereta Cepat Indonesia China
Summary

The Indonesian government is finalizing a plan to finance the Jakarta-Bandung high-speed railway's US$1.18 billion cost overrun. A D-Insights source said the government would meet 25 percent of the cost through a capital injection to PT Kereta Api Indonesia (KAI). KAI is the lead of the PT Pilar Sinergi BUMN Indonesia (PSBI) consortium, the holder of a 60 percent stake in PT Kereta Cepat Indonesia China (KCIC).

According to the source, the government is negotiating 75 percent of the cost overrun, which will be met from debt. "China asks for a guarantee from KAI. The government is looking for the right scheme," a D-Insights source said. Moreover, there is an option to extend KCIC's concession period, which currently reaches 50 years. The extension is related to efforts to return investment and pay project debts from the operating income of the Jakarta-Bandung high-speed rail.

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