KCIC ensures Whoosh construction aligns with GCG
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - KCIC pastikan pembangunan Whoosh sesuai GCG
18 July 2024
By Ichsan Amin
Jakarta, ID – Kereta Cepat Indonesia China (KCIC) has provided insights into the megaproject Whoosh. This project is the primary reason behind the substantial loss of up to Rp7.12 trillion in 2023 experienced by PT Wijaya Karya (Persero) Tbk (WIKA).
KCIC Corporate Secretary Eva Chairunisa stated that the purpose of constructing the high-speed railway was to enhance Indonesia’s transportation system. It also aims to boost the economies of Jakarta and Bandung by introducing a modern, eco-friendly mode of mass transportation.
“During the construction process, the Whoosh high-speed railway project has taken into account numerous aspects, which have been coordinated with all relevant stakeholders,” Eva said in her press statement on Wednesday (17/7/2024).
On the subject of WIKA reportedly incurring a loss of Rp5 trillion due to the construction of the high-speed railway, Eva asserts that all collection-related processes at KCIC must adhere to the established administrative procedures.
“We can say that all collection-related processes at KCIC must adhere to the established administrative procedures so that they can be held accountable, both in terms of finances and good corporate governance (GCG),” she explained.
According to her, Whoosh's performance has been steadily improving. In October 2023, the service operated 14 regular trips per day. By May 2024, this number had increased to 48 trips per day. Looking ahead, the number of trips is expected to reach 62 per day by early 2025.
“The average daily passenger volume for Whoosh is also gradually increasing, currently reaching a record of 24,000 passengers per day,” he said.
At the start of its operation in October 2023, Whoosh had an average daily passenger volume of around 9,000. As of July 2024, this number has increased to an average of 17,000 to 18,000 passengers per day on weekdays and 18,000 to 22,000 per day on weekends. The highest recorded passenger volume was on July 5, 2024, with 24,000 passengers.
“KCIC is continuously making improvements, including enhancing accessibility to Whoosh stations through intermodal integration. Currently, all operational Whoosh stations are connected with other modes of transportation,” he said.
Slow growth
Roads and Railways Forum Head of the Indonesia Transportation Society (MTI) Aditya Dwi laksana stated that the number of passengers was expected to continue increasing, although not significantly. Nonetheless, the growth in passenger numbers is considered stable.
“I believe it is unrealistic to expect a drastic increase in the number of passengers, given the competition from other transportation options like toll road-based services. Therefore, Whoosh's competitive edge lies in its short travel time, punctuality, comfort, and safety, which must be consistently maintained,” he said to Investor Daily.
Strategies such as a dynamic tariff, subscription-based tickets, and feeders must also be consistently implemented. Meanwhile, non-ticket income streams, such as advertisements, space leases, station naming rights, and commercial area development, must also be enhanced.
“The first year is crucial for Whoosh to establish a loyal customer base by offering positive travel experiences during holidays and weekends. Additionally, there is also potential to attract passengers on weekdays by catering to their specific needs,” he added.
He added that, as a mass transportation, the sustainability of Whoosh must also be maintained as there is great interest for this mode of transportation.
“That is where the state’s intervention is needed. As it is a state assignment to a state-owned enterprise (SOE), it must be carried out. Regardless of loss, mass transportation is a national interest,” he added.
Improving performance
WIKA President Director Agung Budi Waskita stated that the Whoosh high-speed railway project was a significant factor contributing to the company's loss of up to Rp7.12 trillion in 2023. Agung conveyed this information during a hearing with the House of Representatives (DPR) Commission VI last week.
Agung explained that, in addition to interest and other financial burdens, WIKA's losses in 2023 were also due to issues related to PT Pilar Sinergi BUMN Indonesia (PSBI).
“There are two key components, which are high interest and other financial burdens. Since 2022, we have recorded significant annual losses from both PSBI and Whoosh,” he added.
PSBI, a subsidiary of PT Kereta Api Indonesia (Persero) or KAI, holds a 60% majority share in PT Kereta Cepat Indonesia China (KCIC). WIKA is also a shareholder in PSBI, owning 39.12% of its shares.
Special Staff III to SOE Minister Arya Sinulingga mentioned that Whoosh has been gradually improving. He also dismissed claims that Whoosh was a contributing factor to the company's losses in 2023.
Arya explained that PT PSBI and the other companies involved in the KCIC project have been gradually improving their performance.
“Our target is around 60 round trips per day. Currently, it is still around 40. The initial target was probably 30 [thousand passengers], but now it has reached 21 thousand. It is impossible to achieve the target when we just started. It is gradual, but the progress is already quite good,” Arya said as quoted by Antara.
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