The View From Indonesia’s China-Built High-Speed Railway, One Year on

The Jakarta-Bandung high-speed rail line, the first in both Indonesia and Southeast Asia, has been operational for a year. It has facilitated around 5.8 million rides, providing a novel experience for locals and tourists alike [para. 1]. This rail is known as the “Whoosh,” an acronym derived from an Indonesian phrase emphasizing timesaving, optimal operations, and superior system quality. Capable of speeds up to 350 kph (217 mph), the train has reduced travel time between Jakarta and Bandung from over three hours to merely 45 minutes [para. 2].

Initially operating 14 trips daily, the railway now performs 48 trips per day, according to PT Kereta Cepat Indonesia China (KCIC), a Sino-Indonesian joint venture. KCIC, established in 2015, began construction in 2016 during President Joko Widodo’s tenure, which just concluded this week [para. 3]. This rail project is an essential part of China’s Belt and Road Initiative, marking the first time Chinese systems, technology, and industrial components have been fully utilized overseas. The project included setting up factories, training local workers, and hiring them for the railway's construction work [para. 4].

The implementation of this project involved adapting to local marketing regulations, technical standards, and cultural practices — potentially easing future overseas railway projects for Chinese companies [para. 5]. Despite the claimed benefits, concerns about the project’s high construction and operational costs have been raised. The Jakarta Post highlighted the substantial debt impact on the state budget, questioning Indonesia’s capacity for such expensive undertakings [para. 6][para. 7].

The project's construction expenses amounted to $7.3 billion, vastly surpassing the initial budget of $4.3 billion. This was due to costly land acquisitions, construction delays, and rising material prices, leading the per-kilometer construction price of the Whoosh line to reach $52 million, higher than China and France's high-speed rail prices [para. 8]. Operational costs are worrisome as passenger numbers alone may not sustain the line, while ticket prices are considered too high compared to local intercity buses [para. 9]. The project is expected to lose 3.15 trillion rupiah ($204 million) in the first year [para. 10].

Despite criticisms, Indonesia's Minister of State-Owned Enterprises, Erick Thohir, reported that the high-speed line contributed 86.5 trillion rupiah to regional GDP. KCIC announced occupancy rates ranging from 70% to 80% in the low season and up to 100% in the high season on the railway's one-year anniversary [para. 11]. China's global rail expansion started with a 2005 project in Turkey and has developed into a significant industry estimated to be worth 5 trillion yuan ($700 billion) across Asia-Pacific, the Middle East, and Africa [para. 12].

China used its strategic financing prowess to outbid Japan for the Whoosh line, offering a $5.5 billion loan with favorable terms. However, financing remains a hurdle for countries with limited fiscal capacity, such as Indonesia, which had to contribute additional funds to complete the project [para. 13]. Geopolitical tensions between China and the U.S. may cause more cautious future collaborations as Southeast Asian nations attempt to balance their foreign partnerships [para. 14]. Besides the Whoosh project, China's rail influence includes lines in Laos, one connecting Belgrade and Budapest, and another planned line between Beijing and Bangkok [para. 15].