State-owned railway operator PT Kereta Api Indonesia (KAI) has raised an alarm over the financial strain posed by the Jakarta-Bandung high-speed rail (KCJB), warning lawmakers that the multibillion-dollar project has become a “ticking time bomb” unless urgent debt restructuring is carried out.

The US$7.27 billion (Rp118.37 trillion) project, known as Whoosh, is operated by PT Kereta Cepat Indonesia China (KCIC), a joint venture between Indonesian and Chinese consortiums. KAI, through its 58.5 percent stake in PT Pilar Sinergi BUMN Indonesia (PSBI), represents the Indonesian side alongside construction giant PT Wijaya Karya (33.4 percent), toll road operator Jasa Marga (7.1 percent), and plantation firm PTPN VIII (1 percent).

PSBI has been bleeding losses since operations began. The consortium booked Rp4.2 trillion in losses in 2024, followed by another Rp1.6 trillion in the first half of 2025. As a result, KAI itself absorbed Rp951.5 billion in net losses as of June this year.

“KAI is deeply concerned about KCIC. It is indeed a ticking time bomb. We will coordinate with Danantara [the government’s investment holding body] to restructure KCIC’s debts and rebalance our portfolio,” KAI president director Bobby Rasyidin told legislators during a hearing with SOEs and Investment Commission VI of the House of Representatives (DPR) on Wednesday, August 20, 2025.

Legislators pressed KAI for concrete solutions, warning that ballooning interest payments could undermine the company’s broader operations. Commission VI member Darmadi Durianto of the Indonesian Democratic Party of Struggle (PDI-P) said the project’s ridership has fallen well short of projections, exacerbating the financial burden.

“When the project was first proposed, the optimistic scenario expected 76,000 daily passengers, while the pessimistic one estimated 50,000. In reality, it’s only 40 to 50 percent of the pessimistic figure, and just 30 percent of the optimistic projection,” Darmadi said.

“This financial model has completely missed the mark. What’s your plan to fix this?” he added.

Other lawmakers suggested that KAI explore equity participation by opening up to public investors, while another PDI-P lawmaker Rieke Diah Pitaloka argued the state should assume the debt outright.

“This was a government-assigned project. The burden should not rest solely on a state-owned company, especially one that provides vital public services. If KAI collapses, the consequences will be wide-ranging,” Rieke said.

Danantara, as an investment holding entity, is seen as a suitable vehicle to take over KCIC’s debt, given its flexibility in raising capital compared with operational firms like KAI.

Without a swift solution, legislators warned, the debt overhang could threaten KAI’s financial health in 2026 and beyond, with mounting losses turning the high-speed rail into a drag on the country’s broader state-owned enterprise sector.