TEMPO.CO, Jakarta – The controversy surrounding the debt of the Jakarta-Bandung High-Speed Train (Whoosh) has resurfaced. The project, which officially began operations in October 2023, is owned by a consortium with 60 percent Indonesian and 40 percent Chinese ownership. Its initial budget of US$5.5 billion (Rp89.6 trillion) ballooned to US$7.27 billion (Rp118.4 trillion) due to cost overruns.
Seventy-five percent of the overrun was covered by new loans from the China Development Bank, with the remainder funded by additional equity from the project company, KCIC. Danantara’s Chief Operating Officer, Dony Oskaria, stated the company is currently assessing two options to resolve the debt.
“Whether we add equity or hand over the infrastructure, as is common in other railway industries, where the infrastructure belongs to the government. These are the two options we are currently assessing,” he said.
Previously, Finance Minister Purbaya Yudhi Sadewa noted that Danantara possesses funds from state-owned enterprise dividends, estimated at around Rp90 trillion. Considering the high-speed train project’s annual debt repayment is around Rp2 trillion, these funds are being considered for servicing the loans from the China Development Bank.
China as a Global Creditor
China has become a dominant global lender, particularly to developing nations. The World Bank’s 2024 International Debt Statistics report shows that China holds approximately 5 percent, or US$441.8 billion, of the total US$8.8 trillion external debt of low- and middle-income countries.
According to Al Jazeera, the total debt owed by the world’s poorest countries to China reached US$22 billion (Rp357.94 trillion) this year. A Lowy Institute report cited by Al Jazeera indicates that 75 of the poorest countries still owe money to China, with the majority of loans tied to the Belt and Road Initiative (BRI), which has financed ports, railways, and highways across Asia, Africa, and Latin America since 2013.
Major China-Funded Projects Facing Debt Issues
Beyond Whoosh, here are several other significant global infrastructure projects largely funded by China:
1. Sri Lanka
According to a report by The Diplomat, Sri Lanka borrowed over US$1 billion from the Exim Bank of China to construct the Hambantota Port between 2007 and 2012. When the port failed to generate adequate income, the Sri Lankan government leased a majority stake to China Merchants Port Holdings for 99 years in 2017, generating US$1.12 billion. However, this money was primarily used to repay debts owed to Western creditors.
2. Laos
The Boten-Vientiane Railway and Power Grid of Laos built the Boten-Vientiane railway line, valued at US$6 billion, mostly financed by China. Additionally, the Laotian government borrowed around US$600 million for 20 power plant projects, bringing the total cost to US$6.7 billion. During debt restructuring talks in 2020, China took a 90 percent stake in the Electricite du Laos Transmission Company, which manages the national power grid.
3. Malaysia
East Coast Rail Link (ECRL)The ECRL project originated during the Najib Razak era. Initially estimated at US$6–9 billion, the finalized contract with Chinese funding was set at US$16.5 billion. Following a change in government, costs were renegotiated and reduced to US$11 billion. The project is currently managed by a Malaysia-China joint venture, with each side holding a 50 percent share.
4. Vietnam
Radio Free Asia reported that the Cat Linh-Ha Dong railway project in Hanoi, which began construction in 2011, aimed to be operational by 2015 but has yet to serve passengers more than ten years later, as reported by Radio Free Asia. The 13.5-kilometer railway’s cost escalated from US$553 million to US$868 million. Vietnam borrowed US$670 million from China and is scheduled to begin repaying the principal loan this year.
5. Peru
As cited in the Organization for Research on China and Asia’s report (ORCASIA), the Chancay Port project was inaugurated on November 14, 2024, by Chinese President Xi Jinping and Peruvian President Dina Boluarte. Built with a US$3.5 billion investment by the Chinese state company COSCO Shipping, the project is considered one of the largest BRI ventures in Latin America.
6. Pakistan
According to a report by NDTV, China-Pakistan Economic Corridor (CPEC), Pakistan owes at least US$10 billion to China for various CPEC projects, including the development of the Gwadar Port in Balochistan. This port serves as a vital component of the BRI, connecting land and sea trade routes.
7. Kenya
Africa Defense Forum noted that the Standard Gauge Railway (SGR) project in Kenya has been dubbed the ‘rail to nowhere’ because the line stopped in the Rift Valley and failed to reach the planned Ugandan border, as noted by the Africa Defense Forum.
From 2000 to 2023, Kenya’s total debt to China reached US$9.6 billion. Kenya is required to pay over US$1 billion annually to service the SGR debt, including US$741 million in principal and US$222 million in interest to the China Exim Bank for the fiscal year 2025–2026.
Ilona Estherina and Anastasya Lavenia Yudi contributed to this report.
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