Government plans to raise public transportation fares

Muninggar Sri Saraswati, The Jakarta Post, Jakarta

Intercity land and sea transportation tariffs will increase by between 10 and 20 percent due to the soaring oil prices, a minister says.

Minister of Transportation Hatta Radjasa said on Tuesday the increase in transportation fares was essential as transportation providers could not compromise on the safety of passengers, while the fuel price increase had caused an increase in the prices of spare parts.

Hatta said the government was examining a proposal from the Association of Land Transportation Owners (Organda), which had demanded a 40 percent increase.

"The Organda proposal is a bit high. But, (the increase) must be between 10 to 20 percent," he said after attending a plenary session at the Regional Representatives Council (DPD).

Hatta said the government considered the land and sea transportation fares increase inevitable as transportation companies must renew their fleet in a bid to ensure the safety of passengers.

Since the government announced the fuel price increase in March, public transportation fares have remained unchanged, except for taxi fares, Hatta said.

"The rising international oil prices have led to an increase in the price of transportation spare parts. If we don't raise the fares, there will be a lot of accidents," he said.

The minister added that the government would also adjust the ceilings on transportation tariffs.

"They are supposed to raise the fares every six months," Hatta said.

The prevailing tariff scheme sets a floor price of Rp 69 per passenger per kilometer, while the highest price is Rp 80, or below 20 percent to over 20 percent of the operational costs, Hatta said.

The government will discuss Organda's demand with transportation stakeholders, including the Indonesia Consumers Foundation (YLKI) and transportation councils.

"We would like to listen to their aspirations. But we will also take into consideration people's economic condition," Hatta said.

The government is responsible for the tariffs of intercity and inter-province transportation systems while regional administrations handle tariffs for regional public transportation systems.

The government provided a land transportation subsidy, in the form of fiscal incentives on import duties and taxes in March following the fuel price increase.

It expected these incentives to enable land transportation operators to slash their operational costs by 5 percent and prevent them from raising their fares by more than 10 percent to offset the impact of the recent fuel price increase.