The Indonesian government is in debt negotiations with China over its $7.3 billion “Whoosh” bullet train, as the Beijing-backed high-speed railway racks up losses and risks creating an unmanageable debt burden for Jakarta, reports the Financial Times. The rail link connecting the capital Jakarta with the third-most populous city of Bandung was developed jointly by Indonesian and Chinese state-owned companies under Chinese leader Xi Jinping and former Indonesian president Joko Widodo. Three-quarters of the project was funded by Chinese loans.
But just two years since commercial operations began, shareholders are struggling to make a profit and pay back debt. The much-vaunted project could strain Jakarta’s finances, which are already under pressure from President Prabowo Subianto’s spending plans, as the debt comes with state guarantees.
Investment minister Rosan Roeslani has said that Jakarta is seeking a “comprehensive” debt restructuring to prevent “things like the possibility of default and so on in the future”.