Pacific Money | Economy | Southeast Asia

Indonesia’s Whoosh Feels the Squeeze in 2025

The country’s first high-speed rail line continues to operate at a loss. Will this place an unsustainable burden on its fiscal resources?

A high-speed locomotive sits at a station in Jakarta, Indonesia.

Whoosh, Indonesia’s first high-speed rail, opened to much fanfare in October 2023. The line, which stretches 143 kilometers from Jakarta to Bandung and reaches speeds above 300 kilometers per hour, has been intensely scrutinized in the years since. Led by Chinese firms and financed primarily through the China Development Bank, the project was delivered late and over budget. The eventual price tag was a little over $7 billion.

Whoosh has lost hundreds of millions of dollars since becoming operational, and many have questioned the sustainability of the debt as well as whether the very large costs can be justified given the fact that Jakarta and Bandung are not that far apart and were already well-served by existing modes of transport including buses, toll roads, and conventional rail. Here on the blog, we have been following this project for several years.  So did 2025 shed any new light on these issues?

Whoosh is structured as a joint venture called PT Kereta Cepat Indonesia China or PT KCIC. 40 percent of the joint venture is held by Chinese firms, and 60 percent by Indonesian firms through an entity called PT Pilar Sinergi BUMN Indonesia (PT PSBI). The two main Indonesian partners are state-owned railway operator Kereta Api Indonesia and state-owned construction company Wijaya Karya, which also participated in the railway’s construction.

From KAI’s 2025 financial report, we can see that PT PSBI lost a total of IDR 5 trillion, which is around $279 million at current exchange rates. Of this, KAI absorbed around $162 million, which is up from $124 million in 2024. Wijaya Karya reported a loss of IDR 1.6 trillion in 2025 from its participation in the joint venture, which is about $90 million.

It is very likely that Whoosh will continue operating at a loss in the years ahead. For now, that figure seems to be a little under $300 million. The next question is, does this place an unsustainable burden on Indonesia’s fiscal resources?

In my opinion, the answer is no. Yes, Indonesia’s fiscal space is tightening but the government can clearly afford $300 million a year to cover losses at Whoosh. Other modes of transportation, including long-distance rail and urban transit systems like Jakarta’s commuter rail system, are already heavily subsidized. Of course, people can reasonably disagree about whether this is a good and proper use of public funds, especially given mounting fiscal pressures, but it almost certainly does not pose a systemic risk to Indonesia’s fiscal solvency or ability to repay its foreign debts.

While the government of Indonesia has the fiscal space to cover Whoosh’s operating losses, the real question is where those losses should be allocated. Currently, they fall on the state-owned companies in the joint venture, an arrangement which is........

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