A tale of two systems in Jakarta's transport

This is the first of two articles on transportation in Jakarta by Heru Dewanto, who heads the Center for Technology and Industry Development. He is also CEO of the Jakarta-based Rekainfra International company which is among the consultants for the city's mass transit project.

JAKARTA (JP): Those who have visited the Indonesian capital and have been trapped in the battlefield of Jakarta's traffic would agree: This city -- with a projected population of over 12 million by the year 2015 -- is heading for total gridlock in a few years if measures are not taken to address its urban transportation management.

For years, extremely severe congestion and low levels of services have been taken for granted by Jakartans. Part of the solution is the introduction of efficient, cost effective and affordable public transportation systems which will encourage the move of the commuting workforce from roads to rail, thus easing the burden on the existing road system.

This can further be assisted by, among other things, added capacity and a comprehensive traffic management system.

The provision of mass transit in our developing cities has been our main concern for many years -- the provision of a safe, reliable, quick and comfortable means of transportation combining the convenience of private cars and the compact movement of public transit.

The basis of the development for Jakarta's mass transit was the Consolidated Jakarta Mass Transit Network -- based on three studies that prepared alternative forecasts of mass transit passenger demand in Greater Jakarta. These were the studies of the Integrated Transport System Improvement by Railway and Feeder Services in 1990, the Jakarta Mass Transit System Study and the Transport Network Planning and Regulation project both in 1992.

The studies differed in their emphasis but resulted in slightly different networks for Jakarta's mass transit.

Though the network has been prepared since 1994, the question lies in the ways of providing it. Financial constraints of the government have led to a major shift toward private provision.

Private infrastructure is mostly being financed through limited or nonrecourse project finance techniques in which the lenders do not have recourse to the parent company but instead rely primarily on the cash flow generated by the project.

This results in the project-company asking the government to help mitigate both the commercial and sovereign risks. Compared to other infrastructure, mass transit is associated with an even more complex risk structure. The state would thus need to provide direct or indirect financial support to maintain financial viability and to attract the private sector.

The private sector's reluctance to fund this sector is caused by critical issues -- higher market risks, extremely huge initial capital costs, long-term investment, complex operation and high operating costs.

Also, there is reliance on operating subsidy, complex relations between the rail system and civil works, the low level of willingness of the user to pay, a long payback period and huge land requirement. Mass transit would be dependent upon related infrastructure development, and would moreover have to face unequal competition with highways.

The mass transit project thus needs new approaches. Private investment in mass transit needs to become financially viable with either at least some budget support, significant increase in fares or a government subsidy.

Just before the onset of the economic crisis Jakarta had two competing developments for mass transit in which both would share the north-south corridor of Jakarta city: the subway and the Jakarta Integrated Toll Road and light rapid transit (LRT), widely known as the triple-decker.

The development of each appeared surprisingly stimulating, as if the two were highly profitable investments that could attract two private groups of companies. Given the lack of legal and regulatory framework for private participation in this area, that situation could only be explained by the fact that the competition was not based on a solid fundamental structure of private provision on mass transit, but more on competing political powers, reflecting the situation at that time.

However, efforts of the two groups of companies in promoting mass transportation for Jakartans should be appreciated.

The next concern was the Jakarta railway network. If two lines of the network were to be developed, they should have represented the two most prioritized lines. The urban rail master plan ought to have been the basis for any development and it should have been the government who decided which lines were most needed. The city should not allow any private initiatives to simply pick routes or make their own routes.

The original idea of the triple-decker was to provide a mass transit system that was as far as possible independent of any direct or indirect government funding and/or subsidies. This would be partly achieved by internal subsidy from toll road to LRT. It was expected to be a solution to the age-old problem of road versus rail, and capital/operating costs of public transportation versus revenue.

This would be achieved by the combination of an LRT system and a toll road, both forming a common transportation corridor. However, the minimum requirement for initiating this concept would be that both means of transportation should be designed for a common route as the bottom line. The concept could not be developed simply by attaching a toll road route to the planned mass transit route.

As the name triple-decker suggests, it was to be a structure which, in part, consisted of levels, of which the topmost was a six-lane toll road. The next level was a double tracked LRT. This combination would result in minimized land requisition, optimized structure form and eventually reduced cost compared to if each system were to stand separately.

The combination concept would require integration of legal aspects as in the past, regulations not available to accommodate private investment in two different means of transportation.