Thu, 23 Apr 2009
Andhika Suryadharma, Research Analyst

Mass rapid transportation facilities in Indonesia remain undoubtedly inadequate and underutilized.

Recently, a friend told me about a trip to Surabaya when he was forced to make a stop in Semarang station in order to use the bathroom as the toilet on the train was in an extremely bad condition.

Nowadays, train users are often afraid to use the train due to safety reasons, particularly when pas-sengers sit on the roof of the Jabodetabek electric trains, for example, to avoid paying the train fare.

Additionally, poor service is also reflected in the lack of punctuality as trains are rarely on time.

This is a concern in my opinion considering the train is one of the best potential modes of land transportation, for several reasons.

First, the train requires lower investment than any other mode of land transportation.

To build a railway would only require an average of 22 meters in width compared to a toll road that would need to be maybe 60 meters wide.

This width requirement would mean more expensive land acquisition costs.

Second, the train is more energy efficient. Train transportation needs only three liters of fuel per kilometer compared to a bus which requires ten liters per kilometer.

Having said that, it is definitely worth noting that out of the total railway network in Indonesia of approximately 6,529 km of track, only 72 percent of the track is in use.

Third, not only is the train the fastest mode of land transportation, but it also can carry more passengers than any other inland vehicle.

A train with eight carriages can transport as many as 1,500 peo-ple, equivalent to an armada of 20 buses.

Both government and private sector should therefore seriously consider the opportunity to extensively develop this business segment so as to provide the best alternative mode of land transportation.

This is imperative in our view given worsening traffic conditions with roads clogged with cars and motorcycles.

It is worth highlighting that the Jakarta electric railway already transports 500 thousand people per day while the busway only transports 238 thousand people per day.

According to the Indonesian Transportation Community it costs as much as five trillion for the rehabilitation of railway stations, and the development of 30 kilometers of railway track as well as the purchase of an electric train.

This is cheaper than the seven trillion Rupiah spent on developing the Lebak Bulus-Kota track for the busway, which has a total length of 26 kilometers.

In the past, the government planned to develop a railway to the airport from Manggarai Sta-tion in South Jakarta, 33.7 kilometers of rail road track repre-senting a total investment of Rp 4.6 trillion.

This would have the capability to transport as many as nine million people per day.

However, this was halted because PT. RaiLink, a joint venture company between PT Kereta Api Indonesia (Persero) and PT Angkasa Pura II (the Soekarno Hatta airport operator), would have had to inject as much as 30 percent in equity into the project.

Hence, so far the project is still undergoing discussion.

Going forward, however, the government has expressed support to inject Rp 19 trillion from the state budget into railway system facilities over the next three years.

As for the subsidy from the government, the state-owned PT Kereta Api Indonesia (Persero) is scheduled to receive Rp 580 billion out of a total of Rp 650 billion initially proposed.

The subsidy is in the form of the Public Service Obligation, which is miniscule in our view when compared to a figure of Rp 81 trillion of fuel subsidies for private cars in 2008.

The outlook of the railroad industry requires not only the government's commitment to inject development funds, but also to do it in a timely manner, unlike the arrivals of trains which are nearly always late.

The writer is an analyst researcher at PT Bahana Securities.




News Search/Filter
Transaction Rates
19 Oct 17
Buy
Sell
AUD1
11,006.49
10,220.18
BND1
10,323.22
9,581.31
BTC1
76,233,928
76,233,928
CAD1
11,246.49
10,441.02
CHF1
14,301.31
13,275.90
CNH1
2,112.49
1,961.53
DKK1
2,222.45
2,063.62
EUR1
16,546.18
15,362.18
GBP1
18,516.13
17,191.63
HKD1
1,796.46
1,668.27
JPY100
12,406.87
11,519.95
LAK1
1.69
1.57
NOK1
1,762.43
1,635.70
NZD1
10,005.39
9,289.18
PGK1
4,486.72
3,971.41
SEK1
1,722.95
1,599.36
SGD1
10,323.22
9,581.31
THB1
422.83
392.44
USD1
14,021.00
13,021.00
VND1
0.62
0.57
Taxation Exchange Rates
31 Aug 16 - 06 Sep 16
USD 1
13,232.00
AUD 1
10,043.30
CAD 1
10,213.70
DKK 1
1,999.40
HKD 1
1,706.22
MYR 1
3,283.28
NZD 1
9,623.63
NOK 1
1,605.23
GBP 1
17,433.70
SGD 1
9,757.68
SEK 1
1,569.45
CHF 1
13,631.10
JPY 100
13,101.00
MMK 1
11.01
INR 1
197.29
KWD 1
43,920.70
PKR 1
126.23
PHP 1
285.00
SAR 1
3,528.53
LKR 1
91.12
THB 1
382.08
BND 1
9,756.53
EUR 1
14,885.50
CNY 1
1,987.61

Okusi Associates: Indonesian Business & Management Services