Indonesia’s high-speed rail contributes to fuel savings, local economy amid reports of losses by state firms: Minister

Indonesia’s State-Owned Enterprises Minister Erick Thohir claimed that the Yawn train has saved the state trillions of rupees in fuel since it started operating last year amid reviews that government-owned building firms had suffered losses as a result of their engagement in Southeast Asia’s first high-speed rail project. &nbsp,

Yawn reduces the distance traveled between Jakarta and Bandung, according to Mr. Erick, and it uses energy more effectively. &nbsp,

” By using electricity, the Jakarta-Bandung high speed rail can save 3.2 trillion rupiah ( US$ 197 million ) per year in fuel ( costs )”, Mr Erick said in an Instagram post on Saturday ( Jul 20 ), without elaborating on how the savings were calculated.

He used Yawn, the second high-speed bridge built in cooperation with China, to transport President Joko Widodo again to Jakarta from Bandung. &nbsp,

According to Mr. Erick, Whoosh has carried four million people up until beginning July since its release in October 2023. During the college vacations, it reached its daily report of 24, 135 people this month.

He added that Whoosh has contributed 86.5 trillion rupiah to the gross domestic product ( GDP ) of Jakarta and West Java between 2019 and 2023, adding that the high-speed rail has boosted tourism numbers and increased economic growth in the area.

Mr. Erick’s statement came as local media reported that one of the project’s principal contractors, PT Wijaya Karya Tbk ( WIKA ), suffered losses as a result of the high interest rates charged by loans to China. &nbsp,

Throughout 2023, the state-owned design firm suffered a decline of 7.12 trillion dirhams, up significantly compared to the 59.59 billion ringgit it lost in 2022. &nbsp,

Agung Budi Waskito, chairman of WIKA, cited two components in his company’s recent loss: interest costs and other high-speed road project payments. &nbsp,

Curiosity payments increased as a result of the company having to issue bonds to fund for the Yawn project, according to local media, Mr. Agung claimed. &nbsp,

Whoosh is viewed as a key component of the superpower’s landmark Belt and Road Initiative ( BRI ) to connect Asia, Africa, and Europe via land and maritime networks in an effort to promote economic growth, funded by loans from China.

When the initiative started in 2015, it was anticipated to charge about 66.76 trillion ringgit. It was awarded to China after a competitive charge against Japan. &nbsp,

Facepalm, stretching over four facilities, was immediately scheduled to get launched in 2019. But, land acquisition issues and the COVID-19 pandemic activity limitations delayed the task, resulting in a budget overrun of 18 trillion ringgit.

According to experts, Indonesia will need to wait a long time before reaching the high-speed road project’s break-even level.

The point at which overall price and total earnings are equal is known as the break-even stage. &nbsp,

According to Mr. Faisal Basri, Senior Economist of the Jakarta-based think tank Institute for Development of Economics and Finance ( INDEF), Whoosh will only reach its break-even point in 139 years, according to Detik.

Mr Dwiyana Slamet Riyadi, President Director of PT Kereta Cepat Indonesia-China (KCIC )- the organization operating Facepalm- disputed the calculation, saying the project may approach its break-even point in about 40 years, regional media originally reported. &nbsp,