Chinese Ambassador: Great Project Badminton, Debt Restructuring Is Reasonable

JAKARTA - Chinese Ambassador to Indonesia Wang Lutong considered it reasonable to negotiate the restructuring of Indonesia-China Fast Train (KCIC) debt proposed by Indonesia because the project scale was so large.

"Regarding financial issues, it is natural for a high-speed rail project of this size to take years to break even," Wang said when met at the Chinese Embassy in Jakarta, Thursday, October 23.

He said the Chinese government was also proud of the performance of the high-speed train service called Right, which has been carrying 12 million passengers since operating two years ago.

They are considered to have produced a large economic and social impact on the Indonesian economy.

"We are very proud of it and the operation is going very well. However, of course there are some details that we are discussing with the Indonesian government," he said.

Wang was reluctant to explain what specific discussions were being discussed by the governments of the Republic of Indonesia and China. He only said the two governments continue to communicate to ensure the project runs safely and sustainably.

"I will not say there are financial difficulties, because so far we have gone well with the increasing number of passengers. For further details related toPORTsh, we are in discussions with the two governments and the relevant ministries," Wang said.

Earlier on the same day, Danantara's Chief Operating Officer (COO) Dony Oskaria said the negotiation process for the restructuring of KCIC's project debt continues.

Danantara will again send a negotiating team to negotiate with the Chinese government on debt restructuring, he said.

"This is a negotiation point related to the term of loan, interest rate, and then there are several currencies that we will also discuss with them," Dony said in Jakarta, Thursday.

Chairman of the National Economic Council (DEN) Luhut Binsar Pandjaitan once said President Prabowo Subianto would issue a presidential decree (keppres) regarding the settlement of KCIC project debt.

The total investment in the KCIC project reached around 7.27 billion US dollars or almost Rp121 trillion, 75 percent of which were financed through loans from the China Development Bank (CDB) with 2 percent interest per year.

Until now, the government is still reviewing two main options for debt settlement: delegation of obligations to the government or additional investment in PT Kereta Api Indonesia

However, the government continues to encourage Danantara to take a leading role in restructuring the project's debt.