Indonesia’s high-speed rail a Belt and Road cautionary tale

When Indonesia’s first high-speed rail line, the Jakarta–Bandung Whoosh, was inaugurated in October 2023, it was hailed as a triumph of progress and modern engineering. President Joko Widodo (Jokowi) proudly rode the train alongside Chinese officials, marking Indonesia’s arrival in the club of nations with high-speed rail.

Yet one year later, the celebration has faded into a sobering reckoning. The project, once touted as fully commercial and self-financing, has turned into a financial quagmire. Its mounting debt, sluggish ridership and dependence on Chinese financing have forced the Indonesian government to deploy its newly created sovereign wealth agency, BPI Danantara, to renegotiate the project’s debt with the China Development Bank (CDB).

What was meant to showcase Indonesia’s modernization has instead exposed the danger and cost of its growing entanglement with China’s Belt and Road Initiative.

The Whoosh project’s numbers are stark. Initially budgeted at around US$6.07 billion, total costs ballooned to more than $7.3 billion due to land acquisition delays, technical complications and pandemic-related overruns. The project’s operator, PT Kereta Cepat Indonesia China (KCIC), has reported massive losses, with state-owned shareholders forced to inject capital to keep it running.

Despite assurances that the project would be funded without sovereign guarantees, the Indonesian government now finds itself indirectly underwriting the costs. BPI Danantara’s intervention is an admission that the line is not commercially viable under its current structure. The agency’s task, renegotiating loan terms and restructuring repayment schedules, is as much about fiscal rescue as it is about face-saving.

But the Whoosh crisis is more than a story of cost overruns; it is a reflection of how deeply China’s economic influence spread into Indonesia’s infrastructure and industrial policy during Joko Widodo’s decade in power.

Widodo, also known as Jokowi, pursued a grand vision of “building from the periphery,” pouring resources into toll roads, ports, power plants and industrial zones. China, through the BRI, became the natural partner for this ambition. But what began as pragmatic cooperation soon evolved into structural dependence.

The Jakarta–Bandung Whoosh was among the first and most visible BRI projects in Indonesia, but it was far from the only one. Chinese financing and companies now dominate a wide array of sectors, from nickel smelters in Sulawesi and industrial zones in Morowali and Weda Bay, to coal-fired power plants, hydropower dams and strategic toll roads across Java and Sumatra. Beijing’s footprint in Indonesia’s economy has grown to a scale unmatched by any other foreign partner.

This shift did not happen overnight. When the idea of a high-speed railway was first floated, it was Japan that conducted the initial feasibility study, proposing a disciplined model based on the Shinkansen system, prioritizing safety, transparency and long-term viability. Yet, in 2015, after months of tense competition, Indonesia shocked observers by awarding the project to China.

Beijing’s offer, faster construction, lower costs, and no demand for government guarantees, proved politically irresistible. Jokowi’s administration wanted quick, visible progress – and China delivered. What it also delivered, however, was a financing model that has since become emblematic of the risks of BRI projects worldwide: opaque terms, inflated costs and often limited local benefit beyond the construction phase.

The decision to build the Jakarta–Bandung line, which is only 142 kilometers long, was flawed from the outset. First and foremost, the route is too short to justify the enormous capital outlay.

Before Whoosh, travelers could already drive the route in about three hours or take a regular train in a little over that time. The high-speed line cuts travel time to roughly 40 minutes, but once the distance to the remote stations, Halim in Jakarta and Tegalluar near Bandung, is factored in, the actual time saved is minimal, if at all.

The ridership potential, confined largely to weekend leisure travelers and upper-middle-class commuters, could never sustain the financial burden of a multibillion-dollar project. The result is a sleek train running at world-class speeds but burdened by unsustainable debt and limited utility.

A far more logical and transformative project would have been the Jakarta–Surabaya line. Spanning almost 780 kilometers, it connects the country’s main economic artery through Cirebon, Semarang, Solo and Surabaya, cities that collectively account for over 60% of Indonesia’s GDP.

A high-speed connection along this corridor would not just shorten travel time from ten hours to under four, it would fundamentally alter Indonesia’s logistics, trade and regional development patterns. It would stimulate new industrial hubs, reduce the cost of goods and integrate the economies of western and eastern Java. In contrast to Whoosh, which serves symbolism more than strategy, a Jakarta–Surabaya line would have real economic impact.

The government has already indicated plans to proceed with feasibility studies for the Jakarta–Surabaya high-speed project, and this time, it cannot afford to repeat past mistakes. If Indonesia is to regain credibility after the Whoosh fiasco, it must start with a clean slate, free from the shadow of political favoritism and foreign dominance.

The Jakarta-Surabaya project’s tendering should be open, transparent and competitive, inviting global participation from Japan, South Korea, Germany, France and other world leaders in railway technology. The goal should not be to exclude China, but rather to ensure no single power dictates the terms. Only through genuine competition can Indonesia secure the best combination of technology, financing and risk-sharing.

This new beginning must also come with structural safeguards. The tendering process should be fully transparent, with public disclosure of bids, loan conditions and project terms. Any partnership should include clear requirements for technology transfer within a defined timeline, enabling Indonesia to build its own engineering and operational capacity.

The use of foreign labor should be limited, focusing on knowledge sharing rather than dependency. Financing must adhere to global benchmarks, ensuring that interest rates and repayment terms are competitive and sustainable. Most importantly, public accountability must be institutionalized,through parliamentary oversight, media scrutiny and civil society participation to prevent a repeat of Whoosh’s opacity.

The stakes go beyond economics. The Whoosh crisis has exposed how infrastructure can become an instrument of geopolitical influence. For China, Indonesia’s infrastructure boom under Jokowi has been a showcase of its BRI success in Southeast Asia, a region where the US and Japan have struggled to match Beijing’s scale and speed.

Indonesia’s strategic location, vast resources and large market make it central to China’s vision of a connected, China-centered Indo-Pacific network. Yet this deepening relationship has come at a cost to Indonesia’s autonomy, with growing perceptions, both domestically and abroad, that Jakarta is leaning too heavily toward Beijing.

That perception will only intensify if China once again dominates the next wave of megaprojects, especially the Jakarta–Surabaya rail. For President Prabowo Subianto, this is a pivotal test. While he has pledged to continue some of Jokowi’s infrastructure agenda, he has also hinted at the need for recalibration.

Prabowo’s challenge is to strike a delicate balance between maintaining access to Chinese capital and markets without letting Indonesia become structurally dependent on them. A more diversified portfolio of partners would not only improve financial and technological outcomes but also strengthen Indonesia’s geopolitical leverage.

Indeed, the Jakarta–Surabaya project could serve as a powerful statement of Indonesia’s strategic independence. If the contract goes to a non-Chinese partner through a transparent, merit-based process, it would send a clear message to both domestic and international audiences that Indonesia is capable of pursuing national interests without succumbing to geopolitical pressure.

Such a decision would not signal hostility toward China but rather reaffirm Indonesia’s long-standing foreign policy principle of bebas aktif, meaning independent and active.

The Whoosh experience should not be dismissed as an outright failure, but as an expensive lesson in sovereignty and foresight. It has revealed the dangers of political haste and the pitfalls of overreliance on any single foreign partner.

Indonesia now stands at a crossroads: it can either repeat the past by rushing into another politically expedient partnership, or it can learn from Whoosh and design a model of infrastructure development that is economically sound, transparent and geopolitically balanced.

The next chapter of Indonesia’s high-speed dream will determine more than the speed of its trains – it will reveal the pace of its political maturity. If Jakarta can resist the temptation of short-term wins and instead commit to long-term integrity, the Jakarta–Surabaya project could become not only a symbol of progress but a declaration of independence.

In a region increasingly defined by great-power rivalry, that may be Indonesia’s most important journey yet.

Ronny P Sasmita is a senior analyst at Indonesia Strategic and Economics Action Institution, a think tank specializing in geopolitical and geoeconomic studies in Indonesia.