Faisal Basri Criticizes Whoosh: Jakarta Bandung Fast Train That Won't Return Capital Until Doomsday

ジャカルタ-バンドン高速鉄道、Whoosh。 (ANTARA)

JAKARTA - The construction of the Jakarta-Bandung High-Speed ​​Rail is considered a manifestation of modern progress. The government is seriously considering the project. However, protests have emerged from various sources. Many consider the high-speed rail to be inefficient. The distance is too short and it will not be profitable.

The harshest criticism came from Faisal Basri. The senior economist emphasized that the government would suffer continuous losses from the Whoosh project. The losses from the Whoosh project are significant. Faisal satirically described the Whoosh project as "until the end of the world, it will never recoup its investment."

A country's development is often measured by its progress in mass transportation. A country with comfortable mass transportation is considered a great nation. The Indonesian government doesn't want to be left behind.

They want the construction of the Jakarta-Bandung High-Speed ​​Rail. The plan has been around since 2014. The government views the presence of a high-speed rail similar to Japan's Shinkansen (bullet train) as a manifestation of modern progress.

The grandiose term is a triumph of humanity over time. The distance between Jakarta and Bandung could be shortened to just 45 minutes. This contrasts with the time taken by regular train or private car, which can take over two hours.

The government then realized this desire by establishing a joint venture between Indonesia and China in 2015. Indonesia was represented by a consortium of State-Owned Enterprises (BUMN), which formed PT Pilar Sinergi BUMN Indonesia. China was represented by Beijing Yawan HSR Co. Ltd.

Senior economist, Faisal Basri. (ANTARA)

The company was known as PT Kereta Cepat Indonesia China (KCIC), a company that later became the operator of the Whoosh train. However, the high-speed rail project didn't live up to its name. The project was originally planned for completion in 2019, but was later delayed to 2023.

Problems arose one after another during its construction. Jokowi enthusiastically announced that the high-speed train would not use the state budget. The government would hand everything over to state-owned enterprises (SOEs) and a debt-loan scheme. However, construction costs escalated.

The state budget was affected. This situation proved what Ignasius Jonan had predicted when he was KAI President Director in 2014. He firmly opposed the Jakarta-Bandung high-speed rail project.

Jonan considered the development to be unfair. Jonan also considered the high-speed train project to have numerous business and operational shortcomings.

"Regarding the Jakarta-Bandung high-speed train, I am the one who is most against it. It is unfair. The spirit of the APBN is the Unitary State of the Republic of Indonesia. If only Java advances, then Papua and the others will be independent," said Jonan in the CEO Speaks on Leadership Class at Binus University as quoted on the page kompas.com, June 30, 2014.

Will Not Return Capital

The Jakarta-Bandung High-Speed ​​Rail investment was initially planned to cost IDR 86.67 trillion. This was then increased to IDR 114.24 trillion as of September 2021. The government considered the budget increase reasonable because the investment was expected to generate profits.

Instead of profit, this situation has made many pessimistic about the government's ability to recoup its investment quickly. One of the most pessimistic about Whoosh's potential recoupment has been Faisal Basri since 2023. The senior economist considered it impossible for the Jakarta-Bandung High-Speed ​​Rail to recoup its investment.

Faisal based his assumption on the total IDR 114.24 trillion investment for the high-speed rail. This means that if the train is consistently filled with 50 percent passengers every day at a fare of IDR 250,000 per person, it will take approximately 139 years to recoup its investment.

Faisal revealed that Whoosh can carry a maximum of 601 passengers. The train operates from 5 a.m. to 10 p.m., meaning there will be 30 departures. This calculation made Faisal increasingly pessimistic that Whoosh could generate significant profits.

Faisal even joked that Whoosh wouldn't be able to recoup its investment until the end of the world. This was especially true if Whoosh didn't consistently attract 50 percent of its passengers. The payback period would take even longer. However, this calculation only included passengers.

Faisal's calculation didn't include operational costs. He also didn't factor in the 3.4 percent annual interest on the debt. He also didn't factor in non-operational income. However, when all of these factors were included, the pessimistic narrative regarding Whoosh's future profitability intensified.

"And if only 50 percent of seats are occupied, with 30 trips and a fare of IDR 250,000, the payback period could take up to 139 years. It's easy to calculate," Faisal said, as quoted by tempo.co on October 17, 2023.