KAI' new management pledges company audit

KAI' new management pledges company audit

Yuli Tri Suwarni, The Jakarta Post, Bandung

Omar Berto, president of state-owned railway company PT Kereta
Api Indonesia (PT KAI), has pledged an audit of the company's
assets, including its routes in Java and Sumatra, in the next
three months to improve operational safety.

Omar who, along with other members of KAI's new board of
directors was sworn in Feb. 13, told reporters here on Wednesday
that the audit and evaluation were badly needed to improve the
company's operation and service to the public.

"The audit's results will be announced to the public, and we
will not hesitate to make unpopular decisions should the audit
conclude that certain routes or trains can no longer be
effectively maintained," he said.

According to Berto, KAI will also appoint inspectors whose
main tasks will be to supervise the operation of all trains and
train routes.

"The inspectors' main tasks will be to assess whether a train
is in sufficiently good condition, and whether routes which are
not profitable should continue to function," he said.

The new management has also reached an agreement to allocate
special funds to improve overall safety. Berto declined to
specify the money allocated for safety, saying that it has yet to
be discussed with the minister for empowerment of state-owned
enterprises.

KAI, he added, will also revise all railway regulations
instituted during the Dutch colonial era, as many employees have
yet to understand them.

So "regulations can be enforced," and employees violating them
can be punished, he said. The present system of punishments and
rewards, he noted, has yet to gain attention in the running of
the railway company.

According to current rules, responsibility for the railway
operations not only lies in the hands of PT KAI, but also with
the administrations of the regions in which the trains travel.

Omar said that the review will be comprehensive, encompassing
"all important sections in its all networks -- including the
closure of illegal thoroughfares -- to reduce future railway
accidents."

According to the company, there are about 8,500 railway
crossings in Java and Sumatra, but only 1,300 are guarded, owing
to financial problems.

Berto said that KAI would reduce its number of economy-class
trains that have caused financial losses the railway company.

"We must strike a balance between economy-class trains and
commercial ones," he said.

Gatot Wibowo, a spokesman for KAI, said that KAI officials
have had difficulties in making reforms and regeneration because
of financial shortfalls.

"The prolonged financial shortages have a lot to do with the
number of economy-class trains," he said.

"Presently, for every 89 economy-class trains there are 11
commercial trains -- meanwhile, the government has provided very
few subsidies to KAI," he said. The ideal ratio between economic-
class trains and commercial ones, he added, would be 70-to-30.

KAI would not earn a profit if the ratio were 60-40, he added.

According to Gatot, KAI would evaluate the operation of
economy-class, commuter and cargo trains in North Sumatra, West
Sumatra, and Jakarta, as well as the outlying areas, that have
caused material losses to the company.

The government, meantime, has yet to pay this year's subsidy,
which totals Rp 161 billion, to KAI; this has caused the company
to fall into debt with the state-owned electricity company, PT
PLN, for several months.

He added that KIA has suffered Rp 32 billion annually in
material losses in North Sumatra; Rp 29 billion annually in West
Sumatra, and Rp 90 billion annually in Jakarta because of the
high number of economy class and cargo trains in the three
provinces.

Making matters worse have been the frequent railway accidents
that have occurred over the last three years. The accidents have
hundreds left killed and injured, and led to huge financial
losses for KAI.