Jakarta: Indonesia's government will take over a controlling stake in the company operating a $7.3 billion China-funded high-speed railway, its finance minister and a senior official with sovereign wealth fund Danantara said.
Finance Minister Purbaya Yudhi Sadewa said at a joint press conference with Danantara on Wednesday that he will appoint an agency under his ministry to take over a 60% stake in PT KCIC, the company that operates the bullet train. The value of the stake was not disclosed.
Commercially named "Whoosh", the 142-kilometre (88-mile) railway connects Jakarta to Bandung, a city southeast of the Indonesian capital.
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The appointed agency will be responsible for repaying the project's outstanding loan, but will not use the state budget, Purbaya said.
The transaction will be completed at the latest by mid-September, said Dony Oskaria, chief operating officer of Danantara.
In April, Dony said Indonesia had completed debt negotiations with China for the project, but did not provide details.
The project has been mired in problems, including land procurement issues, pandemic-related delays and ballooning costs.
The 60% stake in KCIC is currently held by a consortium of Indonesian state companies, led by state railway firm PT Kereta Api Indonesia, with construction firm PT Wijaya Karya holding a significant share.
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Chinese state firms will continue to hold a 40% stake in the project.
Danantara controls all Indonesian state firms.
