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.