Indonesia
About the Project
The Jakarta-Bandung fast train (Kereta Cepat Jakarta Bandung (KCJB)) is a fast train development from Jakarta, the capital city of Indonesia, to Bandung, the capital of West Java province and Indonesia’s second largest city. The project was carried out by PT Kereta Api Indonesia China and is a joint venture between PT Pilar Sinergi BUMN Indonesia consortium and a consortium of Chinese railway companies.
The fast train was originally announced in 2015 by the President of Indonesia, Joko Widodo as a Business-to-Business scheme between Indonesia and China and not involving public funds.
It is also one of the government’s National Strategic Projects – projects that are identified as having strategic importance and high urgency to implement. National Strategic projects benefit from acceleration of standard approval processes.
However, in 2021 President Widodo amended the original regulation in order to fast track implementation. Critically, the updated Presidential regulation allowed for public funding of the project.
This change led to an increased cost of 1.2 billion USD to 7.27 billion USD and exceeded the cost of the alternate tender proposed by Japan International Cooperation Agency (JICA) which had quoted 6.2 billion USD to complete the project and has significant expertise in building fast rail projects. As a result of the change to public funding and the cost increase, the Indonesian government agreed to finance the project through a loan with China to the value of $560 million to be paid to the China Development Bank at a concessional rate of 3.4% over 80 years.
During construction the project was involved in multiple financing, environmental and workplace controversies.
Corruption risks
The ICRAT assessment found that the indicative risk of corruption was very high (score 5) and likely indicates state capture in project decision making. The red flags indicating a high level of corruption risk were:
- Information submitted during the planning process was insufficient and the proposal was not carefully considered by the review team. This resulted in cost overruns in land acquisition and construction as the costs were not anticipated in the feasibility stage
- Assessments of competing proposals at the tendering stage was not comprehensive and China’s proposal was promoted likely due to political interest close to the election
- Lack of external oversight and checks and balances
- Lack of transparency of project documents such as audit reports, annual reports, contract documents, feasibility studies, and environmental impact assessments.
Construction controversies
Land acquisition
One of the most significant causes of the costs blowouts to this project was land acquisition. Land acquisition was not initially included in feasibility studies and ended up being 30% more than anticipated resulting in protracted negotiations and disputes between the government and landowners over the value of compensation. As of 2025, the Corruption Eradication Commission (KPK) is now looking into potential corruption in the land acquisition for the Rail, following suspicions of embezzlement linked to inflated land procurement.
Safety and security
The fast rail project has suffered multiple accidents and safety concerns:
2019: Pertamina gas pipe fire killed one Chinese worker when foundation work broke
2020: Flooding on several Jakarta-Cikampek toll roads as construction blocked drainage
2021: A pillar collapsed onto an excavator in a botched demolition after safety procedures not followed
2022: Two Chinese workers died and two others were injured when a railway track laying machine went off tracks
Findings
- Arbitrary regulatory framework and minimal regulatory oversight add to complexity. The Presidential Regulation which provides the authority for the project can be amended at any time without legislative oversight. For this project, the change from private to public funding happened quickly, without oversight and resulted in significant increased burden on the public purse.
- Improper planning can result in losses of public money. China won the contract to build the project ahead of Japan because it offered a cheaper price. However, soon after being named the winner cost overruns due to poor feasibility studies meant the value exceeded the Japan offer and the interest of 2% initially proposed became 3.4%.
- Minimal political oversight. TI Indonesia found almost no criticism from Indonesia’s parliament related to decisions that were made to change the financing arrangements for their project, even though these caused long-term harm to Indonesia’s finances. However, the House of Representatives dedicated significant time to more minor matters such as theft of railroad bolts and cables and the use of foreign workers from China.
- Corruption and one-sided effects of China Development Bank funding. The project is funded by the China Development Bank which is considered vulnerable to corruption – a former Vice President of the Bank was accused of receiving bribes. Chinese investment in infrastructure projects, result in one-sided benefits. The investment is used to import technology, raw materials and labour from China. They are also used to control production and secure supply of natural resources in China. In return, infrastructure investments pay high interest, require collateral and often end in default asset appropriation.
- Rubber stamping National Strategic Projects. The process for prioritizing infrastructure projects appears to be a rubber stamp for those seeking National Strategic Project Status. Determinations by the Committee for the Acceleration of Provision of Priority Infrastructure (KPPIP) are often used to boost public image of politicians prior to regional or presidential elections. These projects often don’t provide the economic benefits that is the stated benchmark for inclusion in this scheme.
About the project
The Hambalang Athlete House and Sports Center Project in West Java was launched by Indonesia’s Ministry of Youth and Sports to create a national training facility for young athletes.
Initially budgeted at IDR 125 billion (USD 7.5 million), the project’s cost ballooned to IDR 2.5 trillion (USD 149.5 million) before it was halted amid one of Indonesia’s most infamous corruption scandals.
Conceived in the early 2000s, the project aimed to establish a National Sports Training and Education Center, evolving from a two-story sports school as their initial plan. After surveying several sites, a verification team selected Hambalang village in Bogor.
However, this location was already identified as a medium-to-high disaster risk zone by the Ministry of Energy and Mineral Resources. Despite expert warnings against construction, development proceeded in 2010.
According to Indonesia’s Supreme Audit Agency (BPK), irregularities spanned multiple stages—budgeting, procurement, and implementation. The project was officially discontinued in 2012 when the parties involved were proven to have committed criminal acts of corruption.
Corruption risks
The ICRAT assessment found that the indicative risk of corruption was very high (score of 5) and that the risks can be be considered ‘political corruption’ due to conflicts of interest and undue influence from politically exposed persons (PEP). The red flags indicating a high level of corruption risk were:
- Problematic planning processes.
- Conflict of interests between the executive and legislative and undue influence from parliament members.
- Gap in procurement regulation with limited oversight authority by the National Public Procurement Agency.
Corruption controversies
Lack of Budgeting, Procurement, and Information Transparency
Corruption in the Hambalang project began at the planning stage. The project’s fourfold budget increase lacked transparent justification, raising early red flags about manipulation in the budget revision process. The changes led to payments that were inflated by over IDR 514 billion, and total state losses exceeded IDR 706 billion (USD 42.2 million).
Undue Influence and Kickbacks
Investigations revealed that politically exposed persons (PEPs) - including senior members of the Democratic Party - exerted undue influence over project approvals and budgeting. Kickbacks were reportedly exchanged to secure parliamentary support and ensure that PT Adhi Karya, a state-owned enterprise, won the construction contract.
Conflict of Interests
The case exposed deep conflicts of interest between the executive and legislative branches, both dominated at the time by the same political party. This alignment between political and bureaucratic actors facilitated organized political corruption, blurring the line between governance and party interests.
Findings
- Problematic planning processes. The project did not secure the required environmental impact assessment and has a high risk of landslides. The proposed budget increased four times more than the initial proposal without proper due diligence and needs assessment, worsened by the lack of transparency.
- Conflict of interests. Parliament members from the Democratic Party were found to be involved in bribery cases as they approved and secured the project. Project proponents from the executive agency (Ministry of Youth and Sports) and the decision maker deciding and approving the budget from the legislative are from the same party.
- Gap in broader procurement legislation. There is no law on procurement during the project planning and implementation. The procurement is still regulated under Presidential Regulation providing limited oversight authority and a gap in enforcement within the National Public Procurement Agency. The National Public Procurement Agency found several violations during procurement process of this project. However, their recommendations may be ignored. At the same time, PT Adhi Karya, the state-owned enterprise winning the contract, was named a suspect by the Anti-Corruption Commission in the project.
About the Project
The Balang Island Bridge was built to facilitate connectivity between the cities of Samarinda, Balikpapan and the new Nusantara Capital City. It also created a shorter route for transport and logistics in the southern part of Kalimantan. The bridge is 804 meters long and situated on the northern part of the island of Balang connecting to the eastern side of Balikpapan Bay. An existing bridge connects island to the western side of Balikpapan Bay.
Construction of the bridge began in 2015 and was completed in 2021 at a cost of IDR 1.43 trillion. (86.5 million USD) The project was financed by State Sharia Securities (SBSN) or Sukuk and built as part of a collaboration between Ministry of Public Works and Public Housing (PUPR), the Provincial Government of East Kalimantan, the Penajam Regency Government, and the North Penajam Paser Regency Government.
The implementing contractor for the project was the Joint Operation (KSO) system comprised of three companies: PT Hutama Karya, Adhi Karya and Bangun Cipta.
This project falls under the administration for the preparation, construction and relocation of the National Capital (IKN) and statutory provisions from the State Revenue and Expenditure Budget.
Construction of the bridge is part of the ambitious new IKN (National Capital) project. It was chosen for ICRAT review because of the high project cost, and high levels of opposition by environmental activists who argued there was a high risk of environmental damage and pollution.
The project was also problematic because the final bridge height was too low and disrupted shipping in Balikpapan Bay.
Corruption risks
The ICRAT assessment found that the indicative risk of corruption was high (score 4) due to external influence on the decision-making agencies, low adherence to fair market competition rules and lack of information disclosure for project plans, budget preparation or approval. The red flags indicating a high level of corruption risk were:
- IKN Authority administration
- Involvement of State Owned Enterprises (SOEs)
- Incomplete planning documents and weak adherence to regulations
- Risk pattern of funder State Sharia Securities (SSBN)
- Improper impact analysis
- Lack of transparency of project documents such as audit reports, annual reports, contract documents, feasibility studies, and environmental impact assessments.
Environmental impacts
Environmental activists were concerned construction of the bridge would damage forest areas of high conservation value including the Balikpapan Bay mangrove area Sungai Wain Forest.
There was concern the connecting road would damage mangrove areas causing:
- soil erosion
- river pollution
- increased sediment in surrounding rivers.
This has played out with the Puda, Tengah, Berenga, and Tempadung rivers affected by pollution and increased sediment making the water yellow and turbid.
Findings
- Weaknesses in the planning process for the relocation of the National Capital (IKN) to East Kalimantan. In its audit report for the 2022 fiscal year, the Supreme Audit Agency found that planning and related regulations for the relocation were inadequate and incomplete. Administration of the IKN give rise to the potential abuse of power because the authority is self-governed with no external oversight.
- Project planning documents are complex, technical and split into multiple work packages - impossible to assess documentation of entire bridge construction Manipulation of the planning documents into multiple small and disparate documents makes oversight complicated, if not impossible. The Minister for Public Works and Public Housing was not held to account for lack of adherence to or oversight of the planning process.
- Involvement of SOEs and high-level corruption risk in Indonesia Two of the three construction companies were state owned enterprises. These companies and high-ranking officials have been implicated in corruption cases in the past.
- Improper planning and lack of impact analysis Efficiency factors, such as logistics and inter-regional connectivity, were not considered in the planning process which means the project contributes little to social progress and economic growth, despite the huge scale of infrastructure spending and construction in Indonesia.
Additionally, the government is likely deliberately concealing, or not conducting environmental impact studies for several of the new Nusantara Capital (IKN) projects. The IKN is also lacking clear environmental and community planning processes, despite declaring environmental and social impact assessments have been carried out.
About the Project
The Jakarta-Bandung fast train (Kereta Cepat Jakarta Bandung (KCJB)) is a fast train development from Jakarta, the capital city of Indonesia, to Bandung, the capital of West Java province and Indonesia’s second largest city. The project was carried out by PT Kereta Api Indonesia China and is a joint venture between PT Pilar Sinergi BUMN Indonesia consortium and a consortium of Chinese railway companies.
The fast train was originally announced in 2015 by the President of Indonesia, Joko Widodo as a Business-to-Business scheme between Indonesia and China and not involving public funds.
It is also one of the government’s National Strategic Projects – projects that are identified as having strategic importance and high urgency to implement. National Strategic projects benefit from acceleration of standard approval processes.
However, in 2021 President Widodo amended the original regulation in order to fast track implementation. Critically, the updated Presidential regulation allowed for public funding of the project.
This change led to an increased cost of 1.2 billion USD to 7.27 billion USD and exceeded the cost of the alternate tender proposed by Japan International Cooperation Agency (JICA) which had quoted 6.2 billion USD to complete the project and has significant expertise in building fast rail projects. As a result of the change to public funding and the cost increase, the Indonesian government agreed to finance the project through a loan with China to the value of $560 million to be paid to the China Development Bank at a concessional rate of 3.4% over 80 years.
During construction the project was involved in multiple financing, environmental and workplace controversies.
Corruption risks
The ICRAT assessment found that the indicative risk of corruption was very high (score 5) and likely indicates state capture in project decision making. The red flags indicating a high level of corruption risk were:
- Information submitted during the planning process was insufficient and the proposal was not carefully considered by the review team. This resulted in cost overruns in land acquisition and construction as the costs were not anticipated in the feasibility stage
- Assessments of competing proposals at the tendering stage was not comprehensive and China’s proposal was promoted likely due to political interest close to the election
- Lack of external oversight and checks and balances
- Lack of transparency of project documents such as audit reports, annual reports, contract documents, feasibility studies, and environmental impact assessments.
Construction controversies
Land acquisition
One of the most significant causes of the costs blowouts to this project was land acquisition. Land acquisition was not initially included in feasibility studies and ended up being 30% more than anticipated resulting in protracted negotiations and disputes between the government and landowners over the value of compensation. As of 2025, the Corruption Eradication Commission (KPK) is now looking into potential corruption in the land acquisition for the Rail, following suspicions of embezzlement linked to inflated land procurement.
Safety and security
The fast rail project has suffered multiple accidents and safety concerns:
2019: Pertamina gas pipe fire killed one Chinese worker when foundation work broke
2020: Flooding on several Jakarta-Cikampek toll roads as construction blocked drainage
2021: A pillar collapsed onto an excavator in a botched demolition after safety procedures not followed
2022: Two Chinese workers died and two others were injured when a railway track laying machine went off tracks
Findings
- Arbitrary regulatory framework and minimal regulatory oversight add to complexity. The Presidential Regulation which provides the authority for the project can be amended at any time without legislative oversight. For this project, the change from private to public funding happened quickly, without oversight and resulted in significant increased burden on the public purse.
- Improper planning can result in losses of public money. China won the contract to build the project ahead of Japan because it offered a cheaper price. However, soon after being named the winner cost overruns due to poor feasibility studies meant the value exceeded the Japan offer and the interest of 2% initially proposed became 3.4%.
- Minimal political oversight. TI Indonesia found almost no criticism from Indonesia’s parliament related to decisions that were made to change the financing arrangements for their project, even though these caused long-term harm to Indonesia’s finances. However, the House of Representatives dedicated significant time to more minor matters such as theft of railroad bolts and cables and the use of foreign workers from China.
- Corruption and one-sided effects of China Development Bank funding. The project is funded by the China Development Bank which is considered vulnerable to corruption – a former Vice President of the Bank was accused of receiving bribes. Chinese investment in infrastructure projects, result in one-sided benefits. The investment is used to import technology, raw materials and labour from China. They are also used to control production and secure supply of natural resources in China. In return, infrastructure investments pay high interest, require collateral and often end in default asset appropriation.
- Rubber stamping National Strategic Projects. The process for prioritizing infrastructure projects appears to be a rubber stamp for those seeking National Strategic Project Status. Determinations by the Committee for the Acceleration of Provision of Priority Infrastructure (KPPIP) are often used to boost public image of politicians prior to regional or presidential elections. These projects often don’t provide the economic benefits that is the stated benchmark for inclusion in this scheme.
About the project
The Hambalang Athlete House and Sports Center Project in West Java was launched by Indonesia’s Ministry of Youth and Sports to create a national training facility for young athletes.
Initially budgeted at IDR 125 billion (USD 7.5 million), the project’s cost ballooned to IDR 2.5 trillion (USD 149.5 million) before it was halted amid one of Indonesia’s most infamous corruption scandals.
Conceived in the early 2000s, the project aimed to establish a National Sports Training and Education Center, evolving from a two-story sports school as their initial plan. After surveying several sites, a verification team selected Hambalang village in Bogor.
However, this location was already identified as a medium-to-high disaster risk zone by the Ministry of Energy and Mineral Resources. Despite expert warnings against construction, development proceeded in 2010.
According to Indonesia’s Supreme Audit Agency (BPK), irregularities spanned multiple stages—budgeting, procurement, and implementation. The project was officially discontinued in 2012 when the parties involved were proven to have committed criminal acts of corruption.
Corruption risks
The ICRAT assessment found that the indicative risk of corruption was very high (score of 5) and that the risks can be be considered ‘political corruption’ due to conflicts of interest and undue influence from politically exposed persons (PEP). The red flags indicating a high level of corruption risk were:
- Problematic planning processes.
- Conflict of interests between the executive and legislative and undue influence from parliament members.
- Gap in procurement regulation with limited oversight authority by the National Public Procurement Agency.
Corruption controversies
Lack of Budgeting, Procurement, and Information Transparency
Corruption in the Hambalang project began at the planning stage. The project’s fourfold budget increase lacked transparent justification, raising early red flags about manipulation in the budget revision process. The changes led to payments that were inflated by over IDR 514 billion, and total state losses exceeded IDR 706 billion (USD 42.2 million).
Undue Influence and Kickbacks
Investigations revealed that politically exposed persons (PEPs) - including senior members of the Democratic Party - exerted undue influence over project approvals and budgeting. Kickbacks were reportedly exchanged to secure parliamentary support and ensure that PT Adhi Karya, a state-owned enterprise, won the construction contract.
Conflict of Interests
The case exposed deep conflicts of interest between the executive and legislative branches, both dominated at the time by the same political party. This alignment between political and bureaucratic actors facilitated organized political corruption, blurring the line between governance and party interests.
Findings
- Problematic planning processes. The project did not secure the required environmental impact assessment and has a high risk of landslides. The proposed budget increased four times more than the initial proposal without proper due diligence and needs assessment, worsened by the lack of transparency.
- Conflict of interests. Parliament members from the Democratic Party were found to be involved in bribery cases as they approved and secured the project. Project proponents from the executive agency (Ministry of Youth and Sports) and the decision maker deciding and approving the budget from the legislative are from the same party.
- Gap in broader procurement legislation. There is no law on procurement during the project planning and implementation. The procurement is still regulated under Presidential Regulation providing limited oversight authority and a gap in enforcement within the National Public Procurement Agency. The National Public Procurement Agency found several violations during procurement process of this project. However, their recommendations may be ignored. At the same time, PT Adhi Karya, the state-owned enterprise winning the contract, was named a suspect by the Anti-Corruption Commission in the project.
About the Project
The Balang Island Bridge was built to facilitate connectivity between the cities of Samarinda, Balikpapan and the new Nusantara Capital City. It also created a shorter route for transport and logistics in the southern part of Kalimantan. The bridge is 804 meters long and situated on the northern part of the island of Balang connecting to the eastern side of Balikpapan Bay. An existing bridge connects island to the western side of Balikpapan Bay.
Construction of the bridge began in 2015 and was completed in 2021 at a cost of IDR 1.43 trillion. (86.5 million USD) The project was financed by State Sharia Securities (SBSN) or Sukuk and built as part of a collaboration between Ministry of Public Works and Public Housing (PUPR), the Provincial Government of East Kalimantan, the Penajam Regency Government, and the North Penajam Paser Regency Government.
The implementing contractor for the project was the Joint Operation (KSO) system comprised of three companies: PT Hutama Karya, Adhi Karya and Bangun Cipta.
This project falls under the administration for the preparation, construction and relocation of the National Capital (IKN) and statutory provisions from the State Revenue and Expenditure Budget.
Construction of the bridge is part of the ambitious new IKN (National Capital) project. It was chosen for ICRAT review because of the high project cost, and high levels of opposition by environmental activists who argued there was a high risk of environmental damage and pollution.
The project was also problematic because the final bridge height was too low and disrupted shipping in Balikpapan Bay.
Corruption risks
The ICRAT assessment found that the indicative risk of corruption was high (score 4) due to external influence on the decision-making agencies, low adherence to fair market competition rules and lack of information disclosure for project plans, budget preparation or approval. The red flags indicating a high level of corruption risk were:
- IKN Authority administration
- Involvement of State Owned Enterprises (SOEs)
- Incomplete planning documents and weak adherence to regulations
- Risk pattern of funder State Sharia Securities (SSBN)
- Improper impact analysis
- Lack of transparency of project documents such as audit reports, annual reports, contract documents, feasibility studies, and environmental impact assessments.
Environmental impacts
Environmental activists were concerned construction of the bridge would damage forest areas of high conservation value including the Balikpapan Bay mangrove area Sungai Wain Forest.
There was concern the connecting road would damage mangrove areas causing:
- soil erosion
- river pollution
- increased sediment in surrounding rivers.
This has played out with the Puda, Tengah, Berenga, and Tempadung rivers affected by pollution and increased sediment making the water yellow and turbid.
Findings
- Weaknesses in the planning process for the relocation of the National Capital (IKN) to East Kalimantan. In its audit report for the 2022 fiscal year, the Supreme Audit Agency found that planning and related regulations for the relocation were inadequate and incomplete. Administration of the IKN give rise to the potential abuse of power because the authority is self-governed with no external oversight.
- Project planning documents are complex, technical and split into multiple work packages - impossible to assess documentation of entire bridge construction Manipulation of the planning documents into multiple small and disparate documents makes oversight complicated, if not impossible. The Minister for Public Works and Public Housing was not held to account for lack of adherence to or oversight of the planning process.
- Involvement of SOEs and high-level corruption risk in Indonesia Two of the three construction companies were state owned enterprises. These companies and high-ranking officials have been implicated in corruption cases in the past.
- Improper planning and lack of impact analysis Efficiency factors, such as logistics and inter-regional connectivity, were not considered in the planning process which means the project contributes little to social progress and economic growth, despite the huge scale of infrastructure spending and construction in Indonesia.
Additionally, the government is likely deliberately concealing, or not conducting environmental impact studies for several of the new Nusantara Capital (IKN) projects. The IKN is also lacking clear environmental and community planning processes, despite declaring environmental and social impact assessments have been carried out.