Jakarta. Danantara has been working on a proposal that it will present to Chinese creditors in Beijing soon in hopes of restructuring the hefty fast-train train debt, according to the sovereign wealth fund’s boss.

Indonesia had taken out Chinese loans to construct the $7.3 billion Jakarta-Bandung bullet train. The debt problem is now on Danantara’s to-do list, as some state companies that the fund is in charge of hold a stake in the railway that has carried at least 5.1 million passengers this year. 

The Indonesian side repeatedly claimed that it had already entered into talks with China as Jakarta seeks to make the debt more manageable. Danantara’s boss Rosan Roeslani told reporters on Wednesday that he would soon travel to Beijing to lead the negotiations. He is also exploring the possibility of bringing Finance Minister Purbaya Yudhi Sadewa to the negotiating table.

“We continue to engage in talks with Purbaya. We are working together to make sure that whatever proposal we are putting forward is well-made,” Rosan said in Tangerang.

Indonesia will send an initial team to China first before having Rosan and Purbaya engage in the more advanced part of the discussions. Rosan signaled that he would travel to China before the year ends.

“We will do it as soon as possible, if God is willing,” he said.

In his second month as a minister, Purbaya advised against using state money to pay off the debt. The no-nonsense economist said that Danantara had already generated annual dividends -- totaling Rp 80 trillion ($4.8 billion) -- that were enough to return the money that they had owed to China.

Indonesia had borrowed money from the government-owned China Development Bank to cover 75 percent of the total price tag of the Whoosh project. The loans had interest rates of 2 percent on the principal, which go up to 3.4 percent on the overrun costs. Pandemic-related mobility restrictions and land acquisition problems had led to overrun costs of $1.2 billion. 

Kereta Cepat Indonesia China (KCIC), a joint venture led by two consortia representing both nations, operates the Whoosh project. Indonesian consortium PSBI holds a 60 percent stake in KCIC. Railway operator Kereta Api Indonesia is the majority shareholder in PSBI, thereby bearing the brunt of the financial stress.

In early November, President Prabowo Subianto declared that he would take “full responsibility” for the Whoosh debt problem. The retired army general claimed that Indonesia had enough cash at its disposal to pay Rp 1.2 trillion ($72 million) to China each year.

Not long after, Danantara announced it would take care of the train’s operational matters as part of a proposed joint plan with the government. This scheme will see the government dealing with the infrastructure-related expenses.

“This is the best solution for maintaining the project’s viability,” Danantara’s chief operating officer Dony Oskaria revealed to reporters a few weeks ago.