Under the spotlight of a massive rally in front of the State Palace, the House of Representatives approved Tuesday the rail transportation bill, allowing the private sector to take part in the rail industry.
All 10 factions at the House gave their support to the bill in a plenary session here in an effort to reform the much-criticized public transportation system in the country.
They said the rail industry had to become more competitive but continue to provide cheap transportation.
The bill stipulates the private sector, including multinational corporations, is allowed to take part, along with the state-owned PT Kereta Api Indonesia (KAI), in providing rail transportation and the manufacture of supporting facilities.
It requires the government to issue a regulation on the detailed participation of the private sector in the rail industry.
Putra Jaya Husein, spokesman for the National Mandate Party faction, said in the faction's political stand during the plenary session presided over by Deputy House Speaker Muhaimin Iskandar, that despite the private sector's participation, the government remained the only authority in setting train fares to ensure a cheap service.
"PT KAI and private providers must make a profit to let them survive, but the government is required to give subsidies to ensure cheap rail transportation for the public," he said.
The Indonesian Democratic Party of Struggle (PDI-P) asked the government to issue regulations to govern the involvement of the private sector in public and special rail transportation.
"Private corporations should be encouraged to provide rail transportation for destinations with a high load factor and to invest in special rail transportation to create a healthy competition with PT KAI," said Rendi Affandi, spokesman for the PDI-P faction.
Special rail transportation systems carry cargo and raw materials in industrial zones in Java, Sumatra and Kalimantan.
The National Awakening Party (PKB) faction said the private sector should be allowed to operate in Greater Jakarta to help solve the chronic public transportation problem in the capital city.
"In fact, PT KAI has been found to be unable to serve the densely populated region with its residents, most of whom work in Jakarta," said Abdullah Azwar Anas of the PKB faction.
The bill carries a maximum 15-year jail sentence and a maximum fine of Rp 5 billion (US$548,967.9) for train operators found guilty of ignoring safety regulations and companies or individuals who damage rail facilities.
It also mandates the government to audit assets used by PT KA and the company's assets in the coming three years to make the company liquid.
As the legislators assembled to endorse the rail transportation bill, hundreds of active and retired PT KAI employees marched from Gambir railway station to the nearby State Palace, both in Central Jakarta, to demand the inclusion of their rights in the newly-endorsed railway law.
Transportation Minister Hatta Radjasa said after a meeting with leaders of the PT KAI workers union at the State Palace that former PT KAI employees would be paid the way the government paid regular civil servants.
Since PT KAI was converted from a state-owned company into a profit-seeking enterprise, more than 32,000 of its employees have seen their jobs downgraded. Of these, 27,000 are still working for the company, while 9,000 have retired.