By KUSNANDAR & CO., Attorneys at Law – Jakarta, INDONESIA
The
controversy surrounding the Jakarta–Bandung High-Speed Rail (KCJB) project
resurfaced after Danantara’s Chief Operating Officer, Dony Oskaria, proposed
that the government help resolve the project’s mounting debt. He offered two
options: the government could inject additional state capital into PT Kereta
Api Indonesia (KAI), or take over ownership of the KCJB infrastructure, leaving
the operator to focus solely on operations.
Finance
Minister Purbaya Yudhi Sadewa firmly rejected the proposal, emphasizing that
the high-speed rail project was structured under a business-to-business
(B2B) scheme, not as a state-funded initiative. Consequently, the government
has no legal obligation to assume the project’s debt. From a legal and fiscal
governance standpoint, the Finance Minister’s stance is correct.
From
the beginning, the project’s legal foundation was clear. Presidential
Regulation No. 107 of 2015 explicitly states that the project’s financing does
not involve state or regional budgets but is entirely carried out by a
consortium of business entities. This means the government is not a party to
the loan agreement or any debt guarantees. The legal and financial
responsibility rests fully on the consortium—comprising Indonesian state-owned
enterprises (KAI, Wijaya Karya, Jasa Marga, and PTPN VIII) and their Chinese
partners.
Any
attempt to shift the project’s financial burden to the state budget would
contradict key legal principles under Law No. 17 of 2003 on State Finance and
Law No. 19 of 2003 on State-Owned Enterprises (SOEs). The state may only assume
obligations that are explicitly approved and allocated within the national
budget, not debts arising from independent corporate decisions.
The
Finance Minister’s refusal also reflects a commitment to fiscal discipline and
to preventing moral hazard. If every SOE facing financial loss could rely on
state funds to cover its business risks, the distinction between corporate
responsibility and government intervention would blur. Upholding the “no
bailout” principle is crucial to maintaining public trust in how public funds
are managed and ensuring that taxpayers are not forced to underwrite commercial
missteps.
This
decision, however, does not mean there are no viable solutions. Internal
restructuring among SOEs remains possible. Danantara, as the investment
management entity for state-owned enterprises, is mandated to optimize the use
of BUMN assets and dividends. With annual dividend receipts reportedly reaching
tens of trillions of rupiah, it would be reasonable for Danantara to support
KAI or KCIC’s capital position without drawing on public funds. Debt
restructuring negotiations with the China Development Bank can also be
pursued—adjusting terms, tenure, or interest rates—without shifting any
liability to the government.
Meanwhile,
the idea of transferring the KCJB infrastructure to government ownership can
only be justified if supported by a clear legal basis and transparent process.
Such a transfer would require proper asset valuation, political approval, and
regulatory backing to avoid being perceived as a hidden bailout.
Legally,
the government bears no responsibility for KCJB’s debt. Fiscally, the Finance
Minister’s rejection demonstrates a sound commitment to maintaining budgetary
discipline. From a governance perspective, it reinforces the need for SOEs to
act prudently, independently, and professionally in managing their commercial
risks.
The
KCJB debt challenge is indeed complex, but the solution must not compromise the
integrity of state financial management. The burden of resolving it lies within
the corporate sphere, not the national treasury. A strategic national project
should stand as a testament to the strength and independence of Indonesia’s
state enterprises—not as another strain on public finances.
K&Co - October 13, 2025
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