KPPU rejects 2001 fares for non-economy buses

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.