Indonesia’s High Speed Train: Slip Into China’s Debt Trap

By Editorial Team 22/09/2023
fast train
Summary

The government issued Finance Minister Regulation (PMK) No. 89/2023 on government guarantees for loans for the Jakarta-Bandung high-speed train project.

Finance Minister Sri Mulyani said the government would provide guarantees if there were cost overruns. “BPKP and BPK have audited cost overruns, and there are recommendations for handling them,” she said on Sept 19.

Sri Mulyani said that one of the ways to handle cost overruns was through additional state capital injections (PMN) for PT Kereta Api Indonesia (Persero) or KAI. KAI is the leader of the PT Pilar Sinergi BUMN Indonesia (PSBI) consortium, which is implementing the Jakarta-Bandung high-speed train project.

She also said that another way to handle cost overruns was through government guarantees, which would follow the decision of the Jakarta-Bandung Fast Train Committee meeting. “KAI will have additional income,” she said.

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