To Reduce Logistics Costs, AHY Accelerates Development of Inter-Island Railway
Coordinating Minister for Infrastructure and Regional Development Agus Harimurti Yudhoyono (AHY) stated that the government is promoting the development of the national railway network as part of a strategy to strengthen connectivity and reduce logistics costs. This effort is focused on areas outside Java to lower logistics costs, reduce regional disparities, and enhance national connectivity.
AHY conveyed this during a coordination meeting on the follow-up to the development of the Sumatra, Kalimantan, and Sulawesi (SKS) railway network at Tanah Abang Station, Jakarta, on Wednesday (22/4).
In his directions, he emphasised that the development of inter-island railway networks is a direct mandate from President Prabowo Subianto as part of the National Priority Work Programme (PKPN), particularly in the infrastructure and connectivity sector.
“This is a grand vision of the President. We want to ensure that Sumatra, Kalimantan, and Sulawesi are not left too far behind. By building an integrated railway network, we can significantly reduce logistics costs and increase economic competitiveness between regions,” AHY said in a written statement on Wednesday (22/4/2026).
He explained that there is still a significant disparity in rail-based transportation development in Indonesia. Therefore, strategic, planned, and collaborative steps across ministries, institutions, and regional governments are needed.
“We must be honest about the current situation. Our railway network is still very limited compared to other countries. This is not to make us pessimistic, but rather to motivate us to work harder and more directedly,” he added.
AHY also highlighted the low contribution of railways to national mobility, at around 4% for passenger transport and 1% for logistics.
“However, railways have significant advantages, including in terms of efficiency and emissions. Even their contribution to greenhouse gas emissions is very low, less than 1 percent. This must be promoted as part of our commitment to achieving net zero emissions,” he stressed.
In addition, he pointed out the investment gap between road and railway development, which remains quite wide.
“We are not saying that road development is unimportant; it must still be carried out. But we also see a significant gap in railway investment. This is what we must correct together,” he said.
In the context of regional development, AHY explained that each island has different challenges and potentials. Sumatra needs strengthening of existing networks and expansion of new routes, Kalimantan requires building from scratch, while Sulawesi needs integration of networks with industrial areas and flagship commodities.
“Kalimantan does not even have a railway network yet. This is a great opportunity for us to build from the beginning with better planning, including to support logistics and commodities,” he clarified.
To realise the development of an additional network of around 14,000 kilometres and the reactivation of routes, the investment requirement is estimated to reach Rp1,100 to Rp1,200 trillion by 2045.
“The figure is indeed large, but this is a long-term investment for Indonesia’s future. We cannot rely solely on the state budget. There must be creative financing, collaboration with the private sector, and involvement of various parties,” he continued.
Furthermore, AHY emphasised the important role of regional governments in supporting public transportation development, particularly through more proportional budget allocations.
“Regional revenue from the transportation sector is actually quite large, but spending on public transportation is still low. This needs to be encouraged to be more balanced and on target,” he said.
He also affirmed that national railway development must be carried out in an integrated manner with spatial planning and regional growth.
“We cannot build railways partially. It must be integrated with spatial planning, economic centres, and community needs. This is a major effort that requires synergy from all parties,” he concluded.
This coordination meeting serves as an initial step in formulating concrete strategies and policies to accelerate the development of an inclusive, efficient, and sustainable national railway network.