JAKARTA - The government's plan to use a Public Service Obligation (PSO) scheme to support the operation of the Jakarta-Bandung high-speed train, or Whoosh, has drawn scrutiny. Herry Gunawan, Director of the NEXT Indonesia Center, believes the move is inappropriate.
According to Herry, the PSO mechanism cannot be implemented directly because the project is managed by PT Kereta Cepat Indonesia China (KCIC), which is not a state-owned enterprise (BUMN).
"In my opinion, the PSO scheme is certainly not suitable for direct use for Whoosh. The mechanism cannot involve the state budget directly intervening in Whoosh, because the project is managed by KCIC, which is not a state-owned enterprise," Herry told VOI on Wednesday, November 12.
Herry emphasized that state budget funds can only be disbursed to state-owned enterprises or state-owned projects. Therefore, implementing a direct PSO for Whoosh could actually create governance issues.
"Meanwhile, state budget funds can be disbursed to state-owned enterprises (BUMN) or projects. So, if state-owned enterprises directly intervene using the PSO scheme for high-speed trains, from a state budget governance perspective, it would be inappropriate. It would be the same as the government injecting capital directly into the private sector," he said.
On the other hand, Herry said that providing PSO funds could help cover some operational costs, but it would not solve KCIC's financial problems completely.
"If the government uses PSO funds from the state budget for Whoosh operations, that would be one way to help Whoosh. But it wouldn't solve its debt problem," he explained.
According to Herry, Whoosh's operational losses were also caused by passenger numbers that fell short of targets. Therefore, resolving the high-speed train project's financial woes must be comprehensive.
"Whoosh's financial problems are twofold: operational and debt. These two issues must be addressed simultaneously if it is to be healthy, including restructuring or transformation in the operational sector to increase revenue, not just from tickets," he concluded.
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