Friday, 17 October 2025

DEBT WITHOUT DEPENDENCY : DANANTARA’S PATH TO SUSTAINABLE INFRASTRUCTURE FINANCING

 By KUSNANDAR & CO., Attorneys at Law – Jakarta, INDONESIA


The initiative taken by Rosan P. Roeslani, Head of the State Investment Management Agency (Danantara), to comprehensively evaluate the debt repayment plan for the Jakarta–Bandung High-Speed Rail (Whoosh) project is a strategic and commendable move. From the beginning, this ambitious project has stood as a symbol of Indonesia’s drive toward modern, high-technology infrastructure. However, it has also raised persistent questions about financial feasibility, governance, and the long-term sustainability of large-scale investments.

 

Rosan’s statement that three repayment schemes are being developed and will be discussed with the Ministry of Finance and the Ministry of Transportation demonstrates a prudent, data-driven approach to decision-making. It signals that the government is learning from past experiences, moving away from reactive financial management toward more structured and transparent evaluation. The Whoosh project is not merely about building a train line—it reflects Indonesia’s credibility in handling complex, multinational infrastructure collaborations, particularly with China, whose financing and technology have been integral to the project’s realization.

 

Finance Minister Purbaya Yudhi Sadewa’s assurance that Danantara can settle the Whoosh debt without relying on the state budget (APBN) is equally noteworthy. His statement underscores the government’s commitment to maintaining fiscal discipline at a time when global and domestic economic pressures remain high. By leveraging dividends and profits from state-owned enterprises (SOEs), Danantara aims to find a solution within the ecosystem of national assets—an approach that aligns with Indonesia’s broader goal of achieving financial self-reliance and reducing fiscal risk exposure.

 

The proposed options—transforming PT Kereta Cepat Indonesia China (KCIC) into an asset-light operator and providing additional capital injection to PT Kereta Api Indonesia (KAI) through Danantara’s internal funds—represent a new philosophy in managing national strategic projects. The asset-light structure would allow KCIC to concentrate on operations, service quality, and commercial growth, while infrastructure ownership and debt management would be handled by more financially resilient entities. This separation of roles could improve efficiency, enhance accountability, and make the project more appealing to future investors.

 

Nevertheless, these steps must be accompanied by strong transparency and public communication. The government must explain how the debt restructuring will be implemented, what fiscal implications it may have in the medium term, and how projected revenues—estimated at around Rp 1.5 trillion per year—will contribute to repayment. Without open disclosure, skepticism could grow, particularly given past controversies surrounding project cost overruns and shifting financial responsibilities.

 

The broader implication of this effort extends beyond the Whoosh project itself. If successful, Danantara’s model could serve as a blueprint for managing other large-scale national projects—such as renewable energy initiatives, toll road expansions, and new capital city development—without heavy dependence on public funding. It reflects a maturing financial ecosystem in which the state plays the role of enabler rather than sole financier.

 

Ultimately, Rosan’s initiative and Danantara’s evaluation process signify a new chapter in Indonesia’s infrastructure policy: one rooted in sustainability, independence, and accountability. The Whoosh project, once seen as a financial burden, could transform into a benchmark for smarter, more disciplined investment management. If executed with transparency, sound governance, and consistent oversight, this approach can strengthen Indonesia’s fiscal resilience while ensuring that ambitious infrastructure projects truly serve the public interest.


K&Co - October 17, 2025

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