Summary: The Jakarta–Bandung High-Speed Rail project (Whoosh) represents a major milestone in Indonesia’s transport modernization agenda, yet it simultaneously presents fiscal risks that require careful management. The project’s cost escalation, reaching approximately US$7.27 billion, its heavy reliance on foreign loans, and its unstable operational revenues have heightened concerns regarding contingent liabilities that may eventually shift to the state budget. This analysis outlines the project’s historical background, financing structure, and the perspective of CORE Indonesia regarding fiscal risks should the government assume an excessive share of infrastructure responsibility. It also maps the macro- and micro-level implications, ranging from pressures on Indonesia’s national budget to impacts on operators, users, and local economic actors. Comparative insights from international high-speed rail experiences demonstrate that long-term success depends heavily on governance quality, demand forecasting, and sustainable financing structures. As a policy response, the analysis proposes short-, medium-, and long-term mitigation strategies grounded in Islamic Economics, emphasizing principles of justice, transparency, trustworthiness (amanah), balanced risk-sharing, and public welfare (maslahah). These principles reinforce the necessity of sound financing, prudent debt management, and accountable governance in large public projects. Ultimately, the Whoosh High-Speed Rail can become a symbol of national progress if managed with disciplined, ethical, and welfare-oriented fiscal strategies. Without adequate mitigation, however, it risks evolving into a persistent fiscal burden for future generations.
Introduction
The Whoosh Jakarta–Bandung High-Speed Rail is a landmark project in Indonesia’s transport modernization. With travel times reduced to only 30–40 minutes, the system is expected to enhance intercity connectivity, stimulate regional economic growth, and improve mobility efficiency. Behind this technological achievement and national pride, however, lies a critical question: how should the fiscal risks and contingent liabilities associated with the project be managed? This issue has gained prominence due to the possibility that the project’s financial burden could shift to the state should its commercial performance fall short. This article provides a comprehensive yet accessible explanation, outlining the project’s historical development, the meaning of contingent liabilities, fiscal risk assessments, and mitigation strategies viewed through the lens of governance principles and Islamic Economics.
Historical Background of the Whoosh High-Speed Rail Project
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