Indonesia Opens Whoosh High-Speed Railway Between Jakarta & Bandung
Indonesia has inaugurated its first high-speed railway, a US$7.3 billion project backed by China under the Belt and Road Initiative. Indonesia’ s President Joko Widodo launched the service on Monday, (October 2) which connects the capital Jakarta to Bandung, a top economic hub regarded as Indonesia’s Silicon Valley.
The railway is named Whoosh, short for “Waktu Hemat, Operasi Optimal, Sistem Handal”, which translates to “Timesaving, Optimal Operation, Reliable System”. It can reach speeds of up to 350km/h (217mph) with the journey spanning 142km. The railway was originally scheduled to open in 2019 but was delayed due to land disputes, the Covid-19 pandemic and a US$1.2 billion budget overrun.
The rail deal was signed in October 2015 after Indonesia selected China over Japan in fierce bidding. It was financed with a loan from the China Development Bank for 75% of the cost. The remaining 25% came from the consortium’s own funds. A return on the investment will come via ticket sales and any potential future IPO.
Whoosh is operated by PT Kereta Cepat Indonesia-China (PT KCIC) a joint venture made up of four Indonesian state companies with Beijing’s China Railway International.
Indonesian officials say the high-speed railway is expected to improve economic productivity. They also tout the fact that the trains are powered by electricity, which will help reduce the country’s carbon footprint. The trains have been modified for Indonesia’s tropical climate and are equipped with a safety system that can respond to earthquakes, floods and other emergency conditions. The 209-metre (685-foot) train has a capacity of 601 passengers.
PT KCIC has estimated that one-way prices per passenger would range from 250,000 rupiah (US$16) for second class to 350,000 rupiah (US$22.60) for VIP seats. In comparison, a shuttle bus fare costs about 77,685 rupiah, about US$5.
The Jakarta-Bandung route is Phase 1 of a High Speed railway that will eventually extend to Surabaya, which would connect Jakarta to the Eastern Provincial capital in five hours. Opportunities exist for foreign investors in establishing retail outlets along the main route.
About Us
Dezan Shira & Associates assist foreign investors into Asia and have done for over 30 years. We provide market intelligence, legal, tax, and operational compliance services and have two offices in Indonesia. For assistance please contact us at indonesia@dezshira.com and view our ‘2023 Doing Business In Indonesia’ guide below.
An Introduction to Doing Business in Indonesia 2023
A Guide to Indonesia’s Foreign Investment Trends and Key Infrastructure Projects
