Govt to spin off KAI's Jakarta unit
Govt to spin off KAI's Jakarta unit
Rendi A. Witular, The Jakarta Post, Jakarta
In a move to help revitalize the operations of state train operator PT Kereta Api Indonesia (KAI) and improve railway services to the public, the government plans to sell off the firm's Greater Jakarta unit.
The government and the Jakarta administration were exploring ways to hand over the management of the KAI railway system and services in Greater Jakarta to the private sector, State Minister of State Enterprises Sugiharto said.
"Based on input from lawmakers and the fact that KAI is no longer able to provide proper services to the public, it's time to consider selling the unit," he said at the State Palace on Tuesday.
Sugiharto said trains serving the Greater Jakarta area should be managed either by a combination of private and state operators or completely by the private sector. He said KAI was not operating the trains effectively or safely, pointing to the dangerously overloaded trains, where extra passengers were allowed to climb on the roofs, as examples of mismanagement.
"There are about 4.5 million commuters using the railway services each year in the Greater Jakarta area alone. Because of KAI's lack of funds, it would be better to invite the private sector to take over the services there," he said.
The plan to sell off the Greater Jakarta unit came after two recent train accidents in which 10 people died.
The latest accident took place last week on last Thursday in Pasar Minggu, South Jakarta, when a commuter train hit another stationary train from behind at peak hour, killing three people and injuring 600 others.
After the accidents, the government pledged to disburse Rp 500 billion (US$51.5 million) in emergency funds for the maintenance of the railway system in the short term.
The government has estimated that it would need about Rp 11.2 trillion to sufficiently improve the system and services in the long term.
However, Sugiharto said the government was unsure where it would take this emergency money from as there were no extra funds left in the state budget.
"With the lack of funds and a lot of accidents, the government realized that it should try to free up the country's railway system and invite the private sector into the business," he said.
For decades, KAI has enjoyed a monopoly managing the country's railway system and services.
However, critics say widepread corruption in the company, from management level down to the ticket collectors on trains who pocket money from passengers, has led to chronic inefficiencies in its operations.