Perumka makes train ride more comfortable

BANDUNG, West Java (JP): Traveling by train used to mean queuing in long lines for tickets, flocking to dirty coaches, delays and discomfort.

That was years ago, when trains were looked upon as an inferior mode of transportation designed for people in low income brackets.

Today, the depressing scene is changing. Smartly dressed celebrities and chic executives carrying handphones are part of the standard scenery, at least on certain trains.

A return to trains is in vogue all around the world. In European and Asian countries the use of trains as an alternative means of transportation is on the rise. The high-speed train, the TGV, links all the other cities in France to Paris. Japan's bullet train, Shinkansen, plies the Tokyo to Osaka route in three hours and has helped in preventing gridlock on the road. Shinkansen also serves the estimated 30 million to 35 million people who live in the suburbs and commute to work in central Tokyo.

However, transportation expert Eko Budihardjo commented, "Traveling by train is not yet a custom among Indonesians."

Public transportation is always associated with inferiority and chaos. "If a businessman takes a train to work, people may think he is broke," Eko says.

The railway industry in Indonesia, and in neighboring countries, has been allowed to fall into disrepute over the last 20 years because people were more interested in traveling on glamorous jet planes, he added.

The development of road transportation facilities still dominates Indonesia's current public transportation policy. In the period between l939 and l989, the total length of highways and roads constructed, for example, was 19 times that of railway tracks.

Another transportation expert, Roos Diatmoko, said railways are well suited to serve the mass transportation system and should be considered as the best solution to prevent traffic bottlenecks on the roads in big cities. Congestion on city roads could make railroad travel singularly attractive, he says.

Diatmoko adds that trains are better for the environment. "They emit a mere one tenth to one third of the pollutants emitted by cars."

Problems remain, though. Can the state railway company maximize its services to meet the increasing demand for punctuality and comfort? It seems that Perumka should make a real effort to upgrade its dismal image in the eyes of its customers.

The Indonesian Railway Company has been going through tough periods filled with challenges and obstacles, and customers still lodge complaints over the company's inability and limited resources to instantly respond to their demands.

Even after its 49 years of existence, it must be said that the company still has a long way to go before it will really become a viable transportation alternative.

Long-term

"Everything must go through a process. We are now in the process of improving our internal conditions and our public image as well," Perumka's president Anwar Supriyadi told The Jakarta Post in an interview at the company's headquarters in Bandung recently.

Up to now Perumka faces difficulties, including financial constraints, limited human resources and an inadequate management system. All of which affect its services.

"We have tried very hard to limit our shortcomings to the lowest point possible in order to increase the company's efficiency and improve its public services," Supriyadi said.

After years of struggling, Perumka's efforts seem to have yielded positive results. The year l993 was a stepping stone towards becoming a more successful and profitable enterprise. Despite its long-standing reputation as a money-losing endeavor, Perumka's ability to improve its earnings should not be underestimated.

Losses

Since its establishment in l945, the railway company was plagued by financial losses, a bad image and disheartening managerial conditions.

The company suffered a deficit of Rp 79 billion (US$37 million) in l990 and Rp 27 billion in l991, although it was able to reduce it to Rp 1 billion in l993.

"For us, it was quite a big success. We were able to take a breath. However, it is still far from our objective," Anwar said.

This year, l994, the company has made it a target to reach a break-event point for the very first time in its 49 years of existence.

The company's status, meanwhile, has changed four times since 1945. Started as the Djawatan Kereta Api Republik Indonesia, it became the Perusahaan Nasional Kereta Api (PNKA) in l963. PNKA was changed to Perusahaan Jasa Kereta Api in l971 and finally the government turned it into a state company, the Perusahaan Umum Kereta Api (Perumka), in l990 with the aim of improving its performance.

Finance

Healthier finances obviously affect the welfare of Perumka's employees. Quite recently, the company's employees received their first substantial wage increase, nearly 20 percent of their basic salary. Special remunerations will also be given to employees in high risk jobs, including train engineers and field workers.

Perumka will also, for the first time, give bonuses to its employees. "We expect that this little improvement will motivate our staff to work harder," Anwar said.

Overstaffing, however, remains a burden for the company. At present 38,000 employees are on the company's payroll. Ideally, according to a World Bank study, a railway company such as Perumka should have no more than 32,000 employees.

However, trimming the size of the manpower resources on Perumka's payroll will not be easy without carrying out extensive layoffs.

"There will be no mass layoffs. We are still in a transition period, going from a manual to a mechanical system. Therefore we still need the present work force," Anwar said.

A reduction in the company's work force will occur, but only through attribution and voluntary retirements, he stressed.

Innovative

Perumka's accomplishment in trimming its financial losses was due to the implementation of some innovative and profitable programs. Since l990, it has been operating executive and business class trains on the Jakarta to Bandung, Jakarta to Surabaya and Jakarta to Yogyakarta routes.

The introduction of these clean and roomy coaches has drastically boosted Perumka's revenues. In l990, the company generated Rp 238.4 billion in revenues. Still, due to expenses totaling Rp 305 billion the company incurred a Rp 67.3 billion deficit. In l993, its income surged to Rp 460 billion with expenses totaling Rp 461 billion.

The huge losses were previously incurred because 90 percent of the company's total expenses went to subsidizing the operation of the economy class trains which accommodate almost 90 percent of the 69.5 million passengers using Perumka's services. The executive and business class passengers comprise only 12.5 percent of the total.

"The cost of operation is the basic problem that should be addressed," said Anwar.

Agus Salim, a transportation expert from the Bandung Institute of Technology, remarked: "Perumka is like a fat man. A fat man embodies prosperity but also a lack of productivity."

In terms of assets, Perumka may be one of the country's biggest state-owned companies. The company, for example, controls more than 6,000 kilometers of railway tracks, on about 7,200 hectares of land, not including the land used for its employee housing complexes, railway stations and the company's fleet of trains.

Crucial to the new strategy are proposals to convert the company's land assets into lucrative projects to improve the company's balance sheets.

Diversification

"Diversification is essential for Perumka if it wants to increase its earnings," Anwar said.

Perumka plans to add executive and business class coaches to its commercial fleet to meet the increased demand.

"We admit that the commercial services have multiplied our income, but that does not mean that we will ignore the economy class trains. They are still our first priority because Perumka is a public service company," Anwar said.

Perumka is now preparing to upgrade the condition of its economy class trains to "economy class plus", without raising the fares. For its commercial services, however, the company will consider increasing the ticket prices.

"The target market of our commercial services fare is the middle and upper class groups who can afford and are willing to pay higher ticket prices as long as we offer convenience."

Perumka will also apply a new marketing system, including a new ticket delivery system.

New Projects

Perumka, which operates services only in Java and Sumatra, is at present pursuing several improvement projects, including the replacement of more than half of the existing 6,441 kms of railroad track, most vestiges from the Dutch colonial period.

Other projects on tap for this year and next include an increase in the frequency of the Parahyangan services on the Jakarta to Bandung route, from six to ten trips a day. The introduction of the Bengawan train service between Jakarta and Surakarta and the Purwojaya between Jakarta and Purwokerto are also planned.

The company intends to improve the condition of both those tracks as well as supporting facilities in North and West Sumatra.

But, the company's most ambitious project currently underway is the development of the new JS-950 and JB-250 executive services, scheduled to be inaugurated on August 17 next year to coincide with the 50th anniversary of Indonesia's independence.

The completion of JS-950 project will enable passengers to traveling between the Jakarta and Surabaya in nine hours, compared to 14 hours at present.

The construction of double-tracks along some sections of the Jakarta to Surabaya route, such as between Surakarta and Madiun, will allow trains to travel at a maximum speed of 120 km/hour.

The use of sophisticated 2000 HP locomotives and electrification of the signaling system will guarantee comfort and safety for passengers.

The JP-250 project will shorten the traveling time on the Jakarta to Bandung route from two and a half hours to only two hours.

Private

In addition to its own projects Perumka is also exploring plans to invite private investment. At present, a number of private investors, including PT Lorinta, are already involved in several railway projects.

Perumka and PT Lorinta will jointly operate an executive train serving the Jakarta to Surabaya daytime route.

"Basically, Perumka will allow the private sector to serve only routes which the company cannot handle," Anwar said.

The Ministry of Finance is still studying the proposal, but hopes that the project can be started next year.

Other private companies have already proposed to operate commercial trains serving the Jakarta to Merak and the Jakarta to Solo routes.

Anwar, however, promises that Perumka will never forsake its primary goal of providing reliable public transportation services at affordable prices.

"I am optimistic that we can give the public a safe and punctual railway service and make it the preferred mode of transportation," Anwar concluded. (raw/pet)