This article first appeared in The Edge Malaysia Weekly on September 29, 2025 - October 5, 2025

Last week, it was reported that Indonesia is looking to renegotiate its debts stemming from China’s funding of the US$7.27 billion Jakarta-Bandung high-speed rail (HSR) project. The project’s operator is struggling to manage repayments as ticket sales have fallen short of covering the high-interest loans.

In 2015, Indonesia chose to partner China on The Whoosh HSR line, which takes you from Jakarta to Bandung in just 45 minutes, primarily because of China’s flexible financing terms. Japan, the other major contender at the time, lost out.

A significant portion of The Whoosh’s initial US$6.02 billion budget was funded by China Development Bank, which offered a 2% annual interest rate. The remaining funds were secured by the operator PT Kereta Cepat Indonesia China.

From the get-go, The Whoosh was fraught with problems, including delays and cost overruns amounting to US$1.2 billion brought about by the Covid-19 pandemic, and lackadaisical land acquisition practices.

These issues came under renewed scrutiny last week when Bobby Rasyidin, head of the state-owned PT Kereta Api Indonesia, described the HSR as a “ticking time bomb”, revealing that the Indonesian railway operator was in financial distress because of it.

There are important lessons Malaysia can learn from Indonesia’s experience, especially as we revisit plans for our own multibillion-ringgit HSR project between Kuala Lumpur and Singapore — a proposal first put forward in September 2010 but currently on hold.

While the merits and demerits of such a project remain debatable, one thing is clear: the financial viability of large infrastructure investments must be carefully scrutinised. We should take into consideration the billions spent on the East Coast Railway Line. The hard reality is, whether or not they are financially viable, the public will bear the cost of these mega projects.

As the saying goes: A wise man learns from the mistakes of others; a less wise man learns from his own. In this case, Malaysia would do well to learn from Indonesia’s HSR experience before making the same mistake.

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