KPPU rejects 2001 fares for non-economy buses

Dewi Santoso, The Jakarta Post, Jakarta

The Business Competition Supervisory Agency (KPPU) overruled on Wednesday an agreement reached by six bus operators on Aug. 15, 2001, which set the fares for non-economy class buses.

The agency called the bus operators a cartel and in violation of Law No. 5/1999 on monopolistic practices and unfair business competition.

KPPU chairman Bambang P. Adiwiyoto said the bus operators, on behalf of the Association of Land Transportation Owners (Organda), set the bus fare at Rp 3,300 (about 38 US cents).

"We also found that the setting of the fares was a violation to Government Regulation No. 41/1993 on land transportation, which stipulates that fares must be set by service providers and not by their association, in this case Organda," said Bambang.

The six bus operators are publicly listed PT Steady Safe, PT Mayasari Bakti, city-owned PPD, PT Bianglala Metropolitan, PT Pahala Kencana and PT AJA Putra.

Bambang said the Jakarta administration, who passed the bus operators' fare agreement into regulation, had mistakenly acknowledged Organda as service providers.

He said he did not know how the administration made this mistake, as no administration officials in a position to offer an explanation attended the KPPU's hearings.

The agency will ask the government, via the Central Jakarta District Court, to revoke the ruling and to allow fares to be set by individual bus operators.

Projecting fare increases of between Rp 4,000 and Rp 5,000 when each bus operator is allowed to set its own fares, Bambang said this "will create a healthy competition among operators as passengers will choose the lowest fare with the best service".

He said he had discussed with the Indonesian Consumers Foundation the mechanisms for setting bus fares.

Organda deputy head Putu Wirta Antara said he would be pleased to allow each operator to set its own fares, giving passengers more freedom of choice.

"At first, we, as the association, thought that it would be practical for all of us to set a common fare, which would be used by all of us. If the agency sees this as a cartel, then it's up to them.

"But then, that leaves us with question of what is the purpose of the association," he said.

KPPU earlier succeeded in forcing the government to revoke a ministerial decree giving the Indonesia National Air Carriers Association the exclusive right to set airfares. Currently, with only a regulation on ceiling fares, airlines have the freedom to decide their own airfares.