How the Government Funds Railway Tracks Outside Java

Coordinating Minister for Infrastructure Agus Harimurti Yudhoyono, or AHY, stated that the government will accelerate the construction of the railway network outside Java Island. The project encompasses the development of lines in Sumatra, Kalimantan, and Sulawesi, with a total length of around 14,000 kilometres.

According to AHY, the biggest challenge in this ambitious project is funding. He estimates the investment requirement at Rp 1,200 trillion up to 2045. Therefore, the financing scheme has become a primary focus that is currently being discussed seriously.

“The funding will not only come from the state budget but will also involve regional budgets, Public-Private Partnerships (KPBU), as well as investment opportunities from various parties, including foreign ones,” said AHY, quoted from a written statement on Thursday, 23 April 2026.

As an initial step, he continued, the government is studying the development of lines in northern Sumatra, particularly the Banda Aceh-Besitang route. This project is still in the calculation and deepening stage.

On the other hand, the government is also preparing institutional strengthening to ensure effective planning and implementation. The network development will be carried out gradually, both through the construction of new lines and the reactivation of old lines in the medium to long term.

AHY emphasised that the development of railways outside Java is a strategic priority because it is expected to reduce logistics costs while increasing regional productivity. “We hope our railways can play a bigger role, not only for passengers but also for freight transport,” he said.

Nevertheless, he acknowledged that the railway sector has so far faced investment limitations, especially when compared to road development. “There has been underinvestment. This does not mean roads are unimportant, but we need to balance so that railway development is more optimal,” said AHY.

Currently, the railway network is still concentrated on Java Island. Meanwhile, outside Java, its development is not yet even. Sumatra does have a network, but it is not fully connected. Sulawesi’s is still limited, and Kalimantan does not even have a railway network. “This will be our main focus going forward,” he said.