Legal Analysis Of The Failed Investment Of The Jakarta-Bandung High-Speed Rail Project: Ambition Vs Reality
DOI:
https://doi.org/10.69836/ethos.v2i1.179Keywords:
Investment; Failure; Legal Analysis; Infrastructure; Regulation.Abstract
The Jakarta–Bandung High-Speed Railway (KCJB) project, operated by PT Kereta Cepat Indonesia China (KCIC), represents Indonesia’s strong ambition to accelerate national strategic infrastructure development and strengthen bilateral cooperation with China. Nevertheless, behind its physical progress, the project has encountered serious challenges characterized by investment failure, including cost overruns, construction delays, and potential legal disputes. This article aims to analyze the failure of the KCJB investment from a legal perspective by examining the gap between infrastructure ambitions and Indonesia’s regulatory realities. This study employs a normative legal research method using statutory and conceptual approaches, supported by an extensive review of primary, secondary, and tertiary legal materials. The analysis reveals that the KCJB investment failure is largely driven by weak regulatory harmonization, legal uncertainty, imbalanced contract structures, and the complexity of financing schemes that were insufficiently anticipated within the existing legal framework. Furthermore, the absence of competitive tendering processes, overlapping authorities between central and regional governments, and limited legal protection for public interests have significantly increased investment risks. These conditions have ultimately undermined legal certainty and the effectiveness of project governance. The article concludes that strengthening regulatory frameworks, enhancing contractual transparency, and restructuring public–private partnership mechanisms are essential to mitigate the risk of investment failure in future large-scale infrastructure projects and to ensure that development ambitions align with the principles of legal certainty and good governance.
References
Aizawa, T., Takagi, K., & Yamamoto, T. (2020). Environmental considerations in infrastructure project development: Effects on project viability. Journal of Environmental Management, 255, 109911.
Bing, L., Akintoye, A., Edwards, P. J., & Hardcastle, C. (2005). The allocation of risk in PPP/PFI construction projects in the UK. International Journal of Project Management, 23(1), 25-35.
Estache, A., & Wren-Lewis, L. (2009). Toward a theory of regulation for developing countries: Following Jean-Jacques Laffont’s lead. Journal of Economic Literature, 47(3), 729-70.
Fattore, G., & Celesia, C. (2019). Financial risks in megaprojects: Complexity and unpredictability. Construction Management and Economics, 37(5), 283-299.
Flyvbjerg, B. (2007). Policy and planning for large infrastructure projects: problems, causes, cures. Environment and Planning B: Planning and Design, 34(4), 578-597.
Guasch, J. L. (2004). Granting and renegotiating infrastructure concessions: Doing it right. World Bank Publications.
Hodge, G. A., & Greve, C. (2007). Public-private partnerships: A worldwide analysis. Public Administration Review, 67(3), 545-558.
Kim, J., & Park, Y. (2020). Sustainable practices in infrastructure development: Mitigating risks for long-term viability. Sustainability, 12(15), 6102.
Lee, O. K., Kim, Y., & Yang, J. (2018). The impact of political risk on infrastructure projects: A framework for analysis. International Journal of Project Management, 36(2), 217-226.
Matteis, R., Lamberti, L., & Morandi, A. (2021). The balance of power in international infrastructure contracts: Implications for negotiation outcomes. International Journal of Law in the Built Environment, 13(3), 329-344.
Nowak, M., Gawrysiak, S., & Stasiak, S. (2020). Innovative procurement practices for improving project outcomes in public procurement. Journal of Purchasing and Supply Management, 26(2), 100559.
OECD. (2019). OECD Best Practices for Regulatory Policy: Regulatory Enforcement and Inspections. OECD Publishing.
Perera, S., Shakya, S., & Osmani, M. (2019). The role of technology integration in infrastructure projects: Enhancing efficiency and reducing risks. Automation in Construction, 105, 102857.
Salomon, M. (2019). The Law and Practice of International Infrastructure Projects. Cambridge University Press.
Vanclay, F. (2017). Project-induced displacement and resettlement: from impoverishment risks to an opportunity for development?. Impact Assessment and Project Appraisal, 35(1), 3-21.
Van der Meer, J., Koomen, E., & Harkema, J. (2017). Stakeholder engagement and social risk management in infrastructure projects: Insights from practice. Impact Assessment and Project Appraisal, 35(2), 149-157.
Wells, J. (2014). Regulatory uncertainty and infrastructure investment in developing countries. International Growth Centre.
World Bank. (2020). Indonesia Economic Prospects: Boosting Recovery. World Bank Group.
Zhang, S., Zhou, Q., & Cai, W. (2021). The role of regulatory guidance in attracting foreign investment in infrastructure projects. Journal of Urban Technology, 28(4), 23-39.
Zhang, S., Zhang, Y., & Gao, Y. (2019). Understanding the risks in China’s PPP projects: A review of the literature. Sustainability, 11(19), 5336.
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Widi Nugrahaningsih, Seroja Kusuma Dewi, Rini Diah Puri Handayani (Author)
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
