Indonesia's Finance Ministry to manage Whoosh high-speed rail debt

Indonesia's Finance Ministry is set to take over the management of debt associated with the Jakarta-Bandung high-speed railway, branded as 'Whoosh,' on September 15, 2026. While the handover date is confirmed, the government is actively discussing the precise mechanisms for repaying this debt.

Finance Minister Purbaya Yudhi Sadewa stated that the details are still being finalized, but the transfer to the ministry is certain. Initially, the debt management was anticipated to involve Special Mission Vehicles (SMVs) operating under the Finance Ministry. The minister indicated that multiple SMVs could be appointed, with discussions ongoing to determine the most appropriate scheme.

The plan is detailed in Book II of the Financial Note accompanying the 2027 Draft State Budget. It outlines that PT Penjaminan Infrastruktur Indonesia (Persero), or PT PII, an SMV under the Finance Ministry, will be tasked with managing the debt of PT Kereta Cepat Indonesia China (KCIC), the operating company of the Whoosh railway. PT PII is expected to provide a joint guarantee under a first-loss arrangement, meaning it would absorb initial losses before other parties.

Economists suggest that appointing PT PII to manage the debt could serve as a fiscal buffer for the government, potentially mitigating immediate pressure on the state budget. However, they also advise conducting fiscal stress tests to fully assess the potential impact of the government's decision to take over a significant stake in KCIC. Strengthening risk management within PT Kereta Api Indonesia (KAI), a stakeholder in the project, is also part of the government's plan.

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The details are still being discussed. What is certain is that it will be handed over to us around September 15.