August 2011 Edition

Transcription

August 2011 Edition

August 2011 Edition
EDITORIAL
Great Expectation in Railway Sector
The topic of this current issue of SUSTAINING PARTNERSIHP magazine covers the
discussion about the railway sector.
In many countries, railways have become the primary mode of mass transportation to reduce
traffic congestion. On the other hand, railways are proven to be the most efficient mode in
land transportation system both for passengers and cargo.
In China, the government has a big ambition to continuously develop thousands of kilometers
of railway routes for high speed railway. China having vast lands, is dreaming of linking its
cities with high speed rail. Not only for domestic use, high speed railways will also be constructed
to link Western China to India and Southern China to Singapore.
It seems that transportation in Asia will soon be rebuilt. If other countries fail to grow and
follow the changes in the transportation sector, they will lose a opportunity. As a consequence,
other countries will occupy their transportation sector.
What about Indonesia? Of course, Indonesia must also begin to improve. However, when
government budget to develop railway infrastructures is limited, how can we find a solution?
A system must be developed to allow active participation of relevant parties. Law Number 23
Year 2007 regarding Railways is designated to eliminate monopoly and encourage competition
which would improve the quality of services.
Private investment in the railway sector is running very slow. New investments only exist in
new projects such as in East Kalimantan. In this project, Ras Al-Khaimah and Middle East
Coal (MEC) have entered into a partnership to develop coal trains. How about the existing
routes? Are there any investors, private or government, carrying fresh funds? It seems that it
may take many years until an investor is brave enough to invest in the existing railway routes.
ADVISOR
Deputy Minister for Infrastructure
Affairs, Bappenas
DIRECTOR
Director for Public Private
Partnership Development, Bappenas
CHIEF EDITOR
Jusuf Arbi
BOARD OF EDITORS
Delthy Sugriady Simatupang,
Gunsairi,
Rachmat Mardiana,
Novie Andriani,
Mohammad Taufiq Rinaldi,
Ade Hendraputra
MANAGING EDITOR
B. Guntarto
REPORTER/RESEARCHER
Sandra Kaunang,
Agus Supriyadi Hidayat
It is not that easy to open the market for the railway sector. It is even difficult to identify the
limitations between the regulator and operator. For example, when a train caught fire in
Rangkasbitung Railway Station, Banten, there was a debate on which party has the authority
to maintain the train. Should PT Kereta Api Indonesia (KAI) sterilize the rail tracks or should
the Directorate General of Railways do it?
PHOTOGRAPHER
Arief Bakri
Furthermore, will the private sector “dare” to run and operate a new railway company if,
subject to Decree of the Minister of Transportation Number 219 Year 2010, the authority
to operate and maintain railways has been delegated to PT KAI? How will other candidate
railway companies be certain of fair treatment in the operation and maintenance of railway
tracks? What about infrastructure businesses?
TRANSLATOR FROM
INDONESIAN VERSION
Setiana
Some of the articles in this issue of Sustaining Partnership Magazine of will further discuss
this issue.
Please enjoy reading the magazine.
Editor
2
SUSTAINING PARTNERSHIP - August 2011 Edition
GRAPHIC DESIGNER
Indrie Soeharyo
Infrastructure Reform Sector
Development Program (IRSDP)
BAPPENAS
Jl. Tanjung No.47 Jakarta 10310
websites: www.irsdp.org
Tel. (62-21) 3925392
Fax. (62-21) 3925390
CONTENT
HEADLINE NEWS
4
THE FUTURE OF
INDONESIAN RAILWAY SECTOR
7
1001 ISSUES IN THE RAILWAY
SECTOR IN INDONESIA
THE STUMBLING
COMMUTER RAILWAY
10
WAITING FOR ARGO CAHAYA
12
Sarana Multi Infrastruktur
16
POTENTIAL PPP PROJECT
Railway Outside Java
19
PPP PARTNER PROFILE
Minimizing Traffic Congestion
PT SMI (Sarana Multi Infrastruktur)
Government Prepares Monorail Project
22
PPP PROGRAM EDUCATION
21
25
FIGURE - Ignasius Jonan
Learning From The Implementation Of Railway Issues Become My Homework
PPP In India
27
NEWS AT GLANCE
> ‘2011 Public Private Partnership
Book’ Launching
> Socialization Of PPP Regulation On
Infrastructures
August 2011 Edition - SUSTAINING PARTNERSHIP
3
HEADLINE NEWS
THE FUTURE OF
INDONESIAN RAILWAY SECTOR
The railway sector in Indonesia will revive
although it is analog to a “locomotive” which
has slow acceleration and could not run as fast
as we want. However, we could see a light at
the end of this dark tunnel as several railway
projects are offered with the Public Private
Partnership (PPP) scheme.
Kalimantan, Kuala Kurun-Palangkaraya-Pulau Pisang-Kuala
Kapuas Railway in Central Kalimantan, Jakarta Monorail,
Integrated Railway Station in Gedebage Bandung, and
Bangkuang-Lupak Dalam Railway in Central Kalimantan.
In 2011 for instance, the Ministry of Transportation has offered
10 railway projects with a total value of USD 9.78 billion. This
is the largest portion of all infrastructure projects which includes
sea port, airport to terminal which was offered by the Ministry
of Transportation in 2011 totaling USD 15.5 billion.
Based on the Master Plan of Indonesia Economic Development
Corridors (IEDC) as excerpted by Aviliani, from the total
infrastructure investment needs of USD 76.2 billion (priority
I: 2010–2015), the railway sector needs up to USD 29.9 billion.
The ten projects include Soekarno-Hatta Airport Railway, Puruk
Cahu-Bangkuang Railway in Central Kalimantan, Tumbang
Samba-Nanga Bulik Railway in Central Kalimantan, Padang
Monorail, Maratuhup-Kalipapak-Balikpapan Coal Railway, the
terminal in East Kalimantan, Kudangan-Kumai Railway in Central
4
Aviliani, a Senior Economist from Institute for Development
of Economic and Finance (Indef), in the 7th Annual Capital
Market Update 2011 (19/7/2011) held by Citi Indonesia
Securities and Fund Services; also presented railway potentials.
Likewise, from the total infrastructure investment needs of
USD 856.5 billion (Priority II:2016-2030), the railway sector
took the largest portion of up to USD 342.2 billion. It is clearly
stated there is strong enthusiasm to encourage the railway
sector in Indonesia.
RAILWAY DEVELOPMENT
The acceleration of the development of
the railway sector has been encouraged
since 2007 in accordance with the
enactment of Law Number 23 Year 2007
regarding Railways. This Law supersedes
the former Railway Law Number 13 Year
1992.
The fundamental issue of the new Railway
Law is dividing of infrastructure and
facility. As for infrastructure, it is the
responsibility of the government to
develop railway tracks, stations and
operating facilities such as the signaling
and electrification system. While, it is the
private sector who is responsible for the
purchase, operation and maintenance of
locomotives, trains and passenger cars
(Article 31).
If no private company is interested, the
local government alone will operate the
railway facilities (Article 31 paragraph 2).
The incorporation of a company requires
government licenses (Article 32 paragraph
1), while the operating license will be
granted according to the type of railway
network to be constructed (Article 32
paragraph 2). Operating license for interprovince railway network is granted by
the Directorate General of Railways, while
the city or district government will issue
licenses only for district/city railway
networks.
“The government will make
breakthroughs in the tender of
infrastructure projects including railways”
Bambang Susantono said. One of the
breakthroughs is the application of right
to match in tender for project initiators
if required.
The Vice Minister of Transportation
explained that right to match will be
further regulated in the revised
Presidential Regulation Number 13 Year
2010 in conjunction with Presidential
Regulation Number 67 Year 2005
regarding the Cooperation between the
Government and Business Entities in
Infrastructure Provision. Tender is not
required for Special Economic Zones
(KEK) because acceleration is prioritized.
After the coordination meeting at the
office of the Coordinating Ministry for
Economic Affairs, Jakarta (15/7/2011),
the Vice Minister of Transportation
informed that the government has
assigned PT Kereta Api Indonesia (PT
KAI) to develop the Soekarno-HattaManggarai Commuter Train. The
commuter train will cross Duri-Tangerang
Double Track with a length of 19.31
kilometers. To reach Soekarno-Hatta
International Airport from Duri-Tangerang,
a new railway with length of 7 kilometers
will be constructed.
PT KAI was also appointed to construct
and operate those new tracks. The value
of the project is approximately Rp 1.25
trillion which will be funded by the State
Budget. The appointment was supported
by a specific presidential regulation which
demonstrates strong enthusiasm of the
government to accelerate the
development of the railway sector. “PT
KAI was appointed since it is the only
competent railway enterprise. PT KAI is
given a right to select its own partner but
they should engage the local
government,” Bambang Susantono said.
There is an impression that the
government is becoming serious with the
railway sector. Until 2013, the Directorate
General of Railways targets to complete
the double track in the North of Java.
Out of a total of 727 kilometers from
Jakarta-Semarang-Surabaya, Only 295
kilometers have been completed. The
remaining 432 kilometers will be
constructed with funds amounting to Rp.
9.01 trillion.
The development of this double track
railway will start from Cirebon-Brebes,
Although four years has passed since the
enforcement of the new Railway Law,
not many investors have been involved
in the development of new railway
networks. There are merely very few new
players which can be counted by hand,
even only with one hand.
Vice Minister of Transportation Bambang
Susantono, when interviewed
(12/7/2011) in his office, said that the
government is trying as hard as it could
to accelerate the implementation of
railway projects.
Vice Minister of Transportation Bambang Susantono (left), Vice Minister of Trade Mahendra Siregar (right), and Vice
Minister of PPN/Vice Head of Bappenas Lukita Dinarsyah Tuwo (center), visited the dry-port project in Jababeka,
Cikarang, West Java (21/6/2011). Photo: KOMPAS/Haryo Damardono
5
HEADLINE NEWS
Pekalongan-Semarang and SemarangSurabaya. Upon completion, it is expected
that container trains will operate and the
burden of traffic roads will reduce.
The completion of the double track
railway in the Northern Coast of Java
should be regarded as an opportunity for
investors to develop their own railway
companies, both for passenger and cargo
trains. And hopefully, the government
could provide fiscal incentives for the
growing railway companies. Why?
It is obvious that a train is equal to 20
units of trailer trucks. Fuel consumption
of trains is only 0,002 liter per kilometer
per person or in short; six times more
efficient than a bus. Train emission is also
the lowest compared to aircrafts and cars
which is only 51.28 kg CO2 per 1.000
kilometers.
IS IT PROFITABLE?
Questions such as “Is doing business in
the railway sector profitable?” may arise.
Japan Railway East showed that railway
business is profitable. In Fortune Global
500: The World’s Largest Corporations
2011, Japan Railway Company ranked
323rd with a profit of USD 890 million.
How can JR East become a leading
company? Having awareness that the
Japanese Government would not
subsidize the railway sector, JR East
immediately developed non-core
businesses to serve the community. There
are three segments of non-core business
of JR East which are: utilization of station
shopping centres and offices; other
services such as hotels, advertisements,
fitness centers, and credit card services.
In Indonesia, PT KAI is also capable of
earning hundreds of billions of Rupiahs
6
although it has yet to optimize the six
“gold mines”. First, passenger tickets.
Second, businesses in the station such
as kiosk or hotel room rentals. Third,
business developed along the railway
track such as installment optic fiber
networks by Excelcomindo. Fourth, the
use of space above the railway. Offices
or overpass toll roads could be built
above the tracks. Fifth, use of space under
the railway tracks. For instance a shopping
centre could be built below the railway
tracks. Sixth, advertisement placed on
train walls.
To this date, placement of ads on the
train wall and use of space along 4,675
km of railway tracks has not been done
yet. Another business such as cargo
transportation and utilization of space
beneath railway tracks has been
conducted although it is still
unsatisfactory.
Looking at the large potential of the
transportation business, PT KAI is moving
fast to invest in facilities. With a loan
amounting to Rp 4.02 trillion from BNI
and BRI, as agreed on March 2011, PT
KAI has ordered 144 locomotives and
2,400 cargo cars.
personal vehicles, and only 1.3 percent
is transported by train.
At the end of this year, the subsidy for
fuel is predicted to exceed Rp 120 trillion.
Amid the growing economic, there is also
an increasing need for energy while there
is stagnation of oil production. Well, the
question is, how much hundred of trillions
of Rupiahs will this country provide for
fuel subsidy?
When the government relies on the selling
price of fuel to the market, railway
transportation will become attractive. The
question is what kind of transportation
mode could be relied on to quickly
transport cargo in large amount?.
Now is definitely the right time–even as
soon as possible, to develop the railway
sector including with all of its facilities in
Indonesia. When the time comes, railway
transportation in Indonesia could become
the vein of passenger and cargo mobility
(HARYO DAMARDONO, KOMPAS daily
journalist)
If the future of the railway sector is
unprofitable, big investors such as Warren
Buffet would not invest substantial
amount of money in Burlington Northern
Santa Fe, a cargo railway company. The
investment or acquisition of USD 34
billion was mentioned to be the largest
“bet” ever made in the railway sector.
Speaking about potentials, there is also
big room for the railway business to grow.
Based on the information from the
Ministry of Transportation, 92.23 percent
of cargo is transported by truck and only
0.96 percent is transported by the railway
sector. As for land passengers, 98.8
percent is transported by bus and
Vice Minister of Transportation (third from the left wearing a hat)
visits the Cargo Railway Track in Tanjung Priok, Jakarta
HEADLINE NEWS
1001 ISSUES in the RAILWAY
SECTOR in INDONESIA
It has been months since the Letter of the
Minister of Transportation Number
KA.005/1/5 Phb-2010 has not been replied
by the Minister of Finance. In essence, the
letter sent on July 2010 asked for equality in
the treatment of railway and land
transportation with a purpose to increase the
role of railway transportation in Indonesia.
Based on data from the Ministry of Transportation, about
92.23 percent of cargo is transported by truck and only
0.96 percent is transported by train. For land passengers,
about 98.7 percent are transported by bus and personal
cars and 1.3 percent is transported by train. The large portion
of passengers transported by motor vehicles and overloaded
trailer trucks has damaged public roads and caused fuel
subsidy to swell.
In his letter, the Minister of Transportation asked the Ministry
of Finance to re-assess the implementation of non-subsidy
fuel for the railway sector. When the letter was made, railway
transportation paid 40 percent higher on non-subsidy fuel
compared to trucks. In March 2011, the price of non-subsidy
fuel for trains is 212 percent higher than solar for trucks.
Fuel price constantly increases due to increasing demand.
In addition, not so long ago, some Middle Eastern countries
have suffered politic instability.
The letter also explained that other than consuming higher
priced fuel, railway transportation is also subjected to 10
percent Value Added Tax (VAT) and 13 percent track access
charge. In December 2010, the President Director of PT
KAI sent a letter to the Minister of Finance. PT KAI stated
that they are ready to support the conversion of cargo
transportation from public road to the railway under the
condition that VAT is exempted.
Law Number 18 Year 2000 and Government Regulation
Number 144 Year 2000 regarding Taxation stipulates that
only land and water transportation are not affected by VAT.
“If the government wishes for better competitiveness of the
railway sector, we propose for an exemption from VAT,”
said President Director of PT KAI Ignasius Jonan in his letter
number KU.301/XII/39/KA-2010.
Until June 2011, no pro-railway sector policies have been
issued. The railway sector must purchase non-subsidy Fuel
and trucks are permitted to purchase subsidy fuel. There is
no VAT exemption for the railway sector albeit it could
7
HEADLINE NEWS
Previously, the Ministry of
Transportation hoped that the packed
drinking water transportation could
have become the pioneer in railway
cargo transportation and could have
started to operate in the second
semester of 2010. “Budget is limited,
therefore, infrastructure can only be
constructed the following year as we
must wait for the budget,” stated Vice
Minister of Transporation Bambang
Susantono.
The Director General of Railways visits rail track reparation in Jember, East Java
provide a positive impact on the
development of the railway sector. It
is impossible to shift cargo
transportation to the railway sector,
especially when railway transportation
costs are more expensive than trucks.
In North Sumatera, due to higher cost,
transportation of crude palm oil by
railway could not compete with trucks.
REDUCED LENGTH OF
RAILWAY TRACKS
The railway sector must face reality that
it was defeated by land transportation
in the competition. No wonder that
the length of tracks in Indonesia has
not grown but even reduced. In
Indonesia, based on data collected by
the Ministry of Transportation, there
are about 6,714 kilometers of railway
tracks in 2010. However, only 4.678
kilometers are in operation. There is
also an additional of 300 kilometers of
new tracks constructed during the era
of Susilo Bambang Yudhoyono but they
are double tracks not new tracks.
In terms of railway length, Indonesia is
left behind. There are 91,000 kilometers
of railways in China and about 65.000
kilometers in India. Thousands of
kilometers of high speed rail is being
constructed in China.
8
Ironically, although railway length is
limited, land intended for railway
development is occupied. The flyover
pillars in Diponegoro-Pasar Kembang
in Surabaya for instance, will “demolish”
a part of land for the KarangpilangDermaga Ujung tram. Article 401 of
Government Regulation Number 56
Year 2009 regarding Railway
Administration regulates that “All
inactive railway tracks are ‘temporarily
closed’ not “permanently closed.”
Several railway projects must be
postponed due to unavailability of
budget or obstacles which have yet to
be solved by the government. For
example, the operation of cargo trains
for the transportation of packed drinking
water is postponed and will proceed
in 2012. The reason is because the
Directorate General of Railways of the
Ministry of Transportation has not
completed the construction of the
infrastructure.
The Bogor-Sukabumi Railway track still
uses the R33 model made by the Dutch
colony. Therefore, it must be replaced
to support passing locomotives. The
length of this track is 26 kilometers
costing Rp 15 billion up to Rp 20 billion
per kilometer. In other words, additional
funds amounting to Rp 520 billion is
requried.
At present, the residents of Sukabumi
complain about traffic congestion in
Ciawi-Sukabumi toll road. This is
because the road is damaged due to
the heavily passing trailer trucks carrying
mineral water. No wonder that it takes
1-2 hours to travel a distance of 7
kilometers. A packed drinking water
manufacturer in Mekarsari, Sukabumi,
mobilizes 400 trucks every day. In other
words, there is one truck in every four
minutes. This will result in traffic
congestion. Cargo trains operating on
this route are needed not only for
packed drinking water but also for
containers.
Meanwhile, although the Ministry of
Transportation has completed the
construction of three railway tracks in
the dry port at Cikarang, West Java; it
does not guarantee that PT KAI will
optimally operate container trains to
Tanjung Priok.
Vice Minister of Transportation hopes
that cargo trains to Tanjung Priok port
could start operating in July or August
2011. “It is impossible to reach Tanjung
Priok as railway track cannot reach
Jakarta International Container Terminal
(JICT),” said Commercial Director of PT
KAI, Sulistyo Wimbo. In the meantime,
Wimbo said, cargo trains are directed
to Surabaya.
The cargo railway route to JICT is
blocked by the “Mbah Priok” site. An
emplacement for cargo trains and a toll gate to Tanjung
Priok will be built at the said location. It seems as though
the government did not take part in Tanjung Priok so we
doubt that the issue could be resolved soon.
Development Law which is expected to cope with slow land
acquisition has not been endorsed yet by the House of
Representatives of RI.
RE-INVESTMENT
BUDGET GAP
Lack of attention to railway sector can be easily identified
by the existence of budget gap. For example in 2010, the
Directorate General of Railways received Rp 4 trillion, while
the Directorate General of Highways of the Ministry of
Public Works received Rp 18 trillion. In 2011, the Directorate
General Railways still received the same amount while the
Directorate General of Highways received Rp 23 trillion.
The ambiance in the women only car
In terms of budget, it is
not the first or second
time the Ministry of
Transportation “sold”
the railway sector in
order to be noticed by
the Ministry of Finance.
However, there is still
no maintenance funds
so don’t be surprised if
the tracks are “bent”
which causes vibration
when the locomotive is
running fast.
What should we do when public investment funds are very
limited? Liberalization could be proposed through Law
Number 23 Year 2007 regarding Railways. People might
sarcastically say that this law is used to conceal “injustice”
in state funds. In contrast, the government denies it by
stating that the law is meant to eliminate monopoly and
encourage competition to improve the quality of services.
In fact, it is not easy to apply liberalization. The limits
between regulator and operator are hard to identify.
Furthermore, will the private sector “dare” to run and operate
a new railway company if, subject to Decree of the Minister
of Transportation Number 219 Year 2010, the authority to
operate and maintain railways has been delegated to PT
KAI? How will other candidate railway companies be certain
of fair treatment in the operation and maintenance of railway
tracks? What about infrastructure businesses?
It is not easy for new investors to construct new tracks if
they wish to construct a separate route. In this Republic,
land acquisition is hard to predict. The Land Acquisition for
“Are there any other railway companies?” asked Taufik
Hidayat, a researcher of railways from the Indonesian Institute
of Sciences (LIPI). He will strongly request the Government
to provide serious support to PT KAI. “To whom should they
provide support to if not PT KAI?” he expressed.
Taufik complained about the lack of seriousness of the
government. The government, said Taufik, has never fulfilled
any request for subsidy funds for Public Service Obligation
(PSO) of PT KAI. While in fact, those funds can be used to
operate economic trains as a form of the government’s
obligation to its people. In 2010, funds requested for PSO
were Rp 670 billion. On the other hand, only Rp 535 billion
was disbursed. In 2011, Rp 775 billion was proposed but
only Rp 639 of budget is planned to be allocated.
It must be admitted that we are still a long way from satisfying
the passengers. Although the root of the problem is PT KAI’s
position which demands it to satisfy two bosses, the Minister
of Transportation and the Minister of State Owned Enterprises.
The Minister of Transportation often asks for the prioritization
of services and safety rather than profit. Nevertheless, does
the Ministry of State Owned Enterprises share the same
opinion? Rules concerning profit must be written in black
and white and investments for the sustainability of the
operation of trains must be recorded as an achievement
made by the board of directors. If not, PT KAI will prefer to
store their profit to the Ministry of State Owned Enterprises.
If the government favors its citizens, all profits of PT KAI
totaling to Rp 240 billion in 2009 and Rp 280 billion in 2010
should be returned for railway investment.
If profit made in two years amounting to Rp 520 billion is
returned to PT KAI, there is no guarantee that our railway
sector will revive. Why? Based on Article 214 of Law Number
23 Year 2007, the government must still fulfill the backlog
of infrastructure funds amounting to Rp 17.47 trillion.
There are so many issues in the railway sector. We can say
“1001 issues in the railway sector”. If we want our railways
to succeed, radical changes with a clear status is required.
Without such change, our locomotive will remain to run
slowly. Which no one knows until when? (*)
9
HEADLINE NEWS
The Stumbling
Commuter Railway
In 1960, Washington DC commuter railway
designer, Warren Quenstedt, started the
construction of mass transportation in the
capital of the United States with one question:
“What kind of city do we need?” It seems
that this kind of question asked by the
visionary has never been asked to city
residents in Indonesia.
Blok M–Antasari and Kampung Melayu– Tanah Abang nontoll road flyover. Wouldn’t it be better if those funds were
to be used to construct an flyover or underpass for trains
to handle railway intersection problems?
Rather than developing transportation network which reflects
the city’s image, our cities have a messy transportation
network since it follows the amoeba like city landscape. In
general, transportation networks are not connected, as a
result, we seem to have run out of ideas in serving the
mobility needs of the growing population.
The investment value for those six routes is also fantastic
reaching up to Rp 40 trillion. With such amount of funds,
we can buy 10,000 units of articulated buses and 5,000
unites of electric trains. If there is a question, can the
provincial government of DKI Jakarta buy a train? Yes, if it
intends to as it is permitted by Law number 23 Year 2007
regarding Railways. Ignoring the development of mass
transportation will lead Jakarta to the death. However, we
can mathematically count the life cycle of Jakarta which
remains only 2-4 years from 2011. At that time, it doesn’t
matter if you have a Porsche Cayenne Turbo 4.806 cc or
Bajaj which is slightly more powerful than a coconut grating
machine; you won’t be going anywhere with the severe
traffic jam.
Academics, observers and office employees who are bus
and railway lovers have no idea why city development
deviates from the theory of transportation. “Roads are
continuously built, but railways are ignored”, said Anthony
Landjar, Secretary of the Association of Railway Passengers
(Aspeka).
Jakarta – for example, is different. While many cities in the
world are demolishing flyovers, Jakarta is constructing the
10
Moreover, when infrastructures are constructed to mobilize
passengers but not for vehicles, DKI Jakarta keeps on
dreaming of constructing six toll road routes in the city.
While in fact, toll roads will potentially cause traffic
congestion. Jakarta is a city with a widely distributed
population.
of the Electric Trains in Jabodetabek,
Emperor Akihito donated 72 units of
Air-Conditioned Electric Trains series
6000. Now, used trains from Tokyo
Subway are operating in Jabodetabek.
MASS RAPID
TRANSPORTATION
A commuter train at Skogskyrkogården Station,
Stockholm, Swedia; Photo HD
How can we extend the age of our
city? Vice Minister of Transportation,
Bambang Susantono confirmed that it
could be extended with additional
Trans Jakarta units and Electric Trains
(KRL) as soon as possible.
Interestingly, history recorded that in
the hands of the Dutch East Indie
government, transportation in Batavia
was highly regarded. Since April 10,
1899, Batavia Electrische Tram
Maatschappij (BETM) had operated
electrified trams which inspired electric
trains. Electrified trams in the
Netherland, was firstly operated in
1899.
However, in 1900s, transportation in
other cities grew very rapidly. In
December 1927, the first subway
operated from Asakusa to Ueno
Station. In that same year, Jakarta
residents were still using
Menteng–Harmony
or
Menteng–Gunung Sahari–Kota Bawah
electric trams.
In 2016, it is planned that Jakarta
residents will enjoy phase I of Mass
Rapid Transit (MRT) from Lebak
Bulus–Bundaran Hotel Indonesia (15,2
kilometers). Eighteen sets of trams–each
carrying six cars, are projected to
transport 340,000 passengers per day.
With MRT, the trip from Lebak
Bulus–Hotel Indonesia will take only
30 minutes. The headway or distance
between each tram ranges between
five (busy hours) up to ten minutes.
For phase I MRT, government will
invest Rp 15 trillion with a loan from
Japan International Cooperation
Agency (JICA) ”Jakarta MRT is not a
Public Private Partnership (PPP)
because the government alone made
the investment,” said the Vice Minister.
However, the Vice Minister of
Transportation added that, this project
can be shifted to the PPP scheme if after
construction is completed, it is tendered
to the private sector,” Bambang
Susantono said. Probably through tender,
the government will obtain funds to
expand the MRT network in Jakarta.
Moreover, MRT network in Jakarta will
stretch about 110.3 kilometers divided
into two corridors which are the
Southern-Northern corridor from Lebak
Bulus–Kampung Bandan (23.3
kilometers) and Western-Eastern
Corridor (87 kilometers). It will require
not only funds for development of
approximately Rp 1 trilion per kilometer
but also hard work to realize it.
ELECTRIC TRAIN
Then, what about the passengers from
the middle to lower class? With regards
to railway based transportation, in Jakarta
and its surrounding areas, economy class
Electric Trains are the main choice
although it is now being pushed aside
by the Electric Commuter Line.
As Makmur Syaheran, Corporate Secretary
of PT KAI Commuter Jabodetabek said, a
week after the implementation of the single
operation system, the average number of
Now, there are nine subway lines in
Tokyo Metro Line (Ginza, Marunouchi,
Tozai, Chiyoda, Yurokucho,
Hanzomon, Namboku and Fukutoshin
Line), and four subway lines in Toei
Line (Asakusa, Mita, Shinjuku and Oedo
Line). In contrast, Jakarta has none.
In 2000, after seeing the poor condition
A commuter train in Japan; Photo HD
11
HEADLINE NEWS
commuter line passengers is 75-80 percent
of the total Electric Train passengers.
Makmur admited ”In terms of travel, the
commuter line travels more which can
reach 384 trips per day. On the other hand,
the economy KRL only travels 112 times
per day”.
It is clear that, economy class trains
are being pushed aside. An in depth
survey is therefore required to identify
whether there has been a shift from
economy class trains to Electric
Commuter Lines. Or, whether economy
class train passengers have chosen to
use motorcycles instead? We all wish
that there would not be any major
shifts to motorcycles since it could
instigate a significant amount of
externality starting from fuel subsidy,
pollution, until traffic congestion.
The application of the new operating
system for the Commuter Line that
started since July 2, 2011 showed
several weaknesses. The matter of
single operation should not be debated.
It is a general and standard practice in
the world that the metro network (city
tram and commuter) stops at each
station.
KRD Bumi Geulis; Bandung–Cicalengka
and KRD Patas; Surabaya–Sidoarjo and
KRD Susi(Surabaya–Sidoarjo); and
Yogyakarta–Solo and KRDE Prameks
(Prambanan Express).
We could not put too much hope in
these commuters. KRD Susi for
example, only consists of 3-4 passenger
cars. KRD Sulam from Lamongan to
Surabaya only departs two times per
day. It is probable that KRDE
Prambanan Express is the only
adequate one as it has high travel
frequency.
What more can we do now? Factually,
it has been four years since the
liberalization of the railway sector but
there aren’t any new investors willing
to invest.
In addition to the MRT project in
Jakarta, there hasn’t been a single word
regarding the development of railway
transportation by a new investor. There
is nothing, not even a plan for the
operation or development of
infrastructures and facilities. Even for
other modes like monorail.
Probably, prospective investors are
”afraid” about growing number of
motorcycles in the our cities. Without
adequate subsidy to minimize the ticket
price, there will be low number of
passengers of commuter railways as it
must compete with motorcycles which
use subsidized fuel.
The problem is, for example in the city
of Jakarta, the remaining time is two
years. Jakarta must take revolutionary
action–not only thinking–to significantly
reduce traffic congestion. If funding
issues arise, funds must be allocated
more intelligently for transportation
which should be prioritized. People
will need Electric Trains rather than city
parks, decorative lightings, or statues.
Income earned from vehicle tax in
Jakarta is Rp 5.5 trillion per year. It is
better that this income should be reinvested in Electric Trains. Especially
since the Railway Law allows room for
investment by Local Government. We
must not delay the development of
commuter railway as the costs for traffic
congestion will increase. (*)
What must be brought to attention is
the issue of tariff and its relevance with
the minimum standard. Lots of
passengers will be willing to pay Rp
7,000 for the Commuter Line which is
higher than Rp 5,500 (AC economy
class train) provided that it delivers
satisfactory services.
What kind of services must be
provided? Punctuality, clear and real
time information, and availability of
adequate facilities. Nevertheless,
without competitors, it is clear that PT
KCJ and PT KAI will not be driven to
optimize its services.
Not only in Jakarta, PT KAI monopolies
the commuter service in other cities.
For example, Bogor–Sukabumi and
12
An Economy-Class Train Entering The Platform of Mangarai Station
HEADLINE NEWS
Waiting for Argo Cahaya
A white-orange bullet train runs very fast
along the western coastlines of Taiwan. It
crosses the bridge, runs through the hills
departing from Taipei to Kaohsiung. Local
residents call it “Gaosu Tielu”. That’s the
Shinkansen of Taiwan bearing the official
name Taiwan High Speed Rail (THSR).
Just like Shinkansen in Japan, Gaosu Tielu is very
representative and comfortable with wide passenger cabin,
soft train suspension, good-looking interior, reclining seats,
wide leg space as well as clean and hygienic toilets.
The passengers of THSR will of course feel more comfortable
compared to economy class airplane passengers. THSR
passengers should not make themselves busy by checking
in the airport as THSR station is mostly situated in the center
of the city which enable the mobilization of passengers.
Getting on Gaosu Tielu railway train will deliver distinguished
sensation. We will hear a thundering sound when entering
a tunnel and feel the vibrating train body when passing by
another train. In spite of high speed, passengers will remain
comfortable doing their activities such as reading, typing
on their iPad and sleeping.
For passengers from third world countries who mostly have
no high-speed railway network will find it exciting to see
the speedometer screen in the passenger cabin. Especially
since the digital instrument shows 300 kilometer per hour.
Vice Minister of Transportation Bambang Susantono, in
early June 2011, also rode on Gaosu Tielu from Taipei to
Kaohsiung. At that time, the Vice Minister of Transportation
was about to represent Indonesia in the 19th Intelligent
Transportation System for Asia Pacific Region meeting. He
stared at the speedometer screen although his thought may
fly somewhere else. “Then, I asked myself whether it is
possible to construct high-speed rail in the northern coast
of Java island,” he said when interviewed at his office
(12/7/2011).
The corridor of north coast Java from Jakarta to Surabaya
is the only one out of six economic corridors set by the
government. Of course, it will require the vein of
transportation to “link” the economic centers.
Taiwan’s experience in linking its island of economy can
be seen as a lesson. Until 1978, the economy of the two
major cities which are Taipei in the north and Kaohsiung in
the south (345 kilometers) had been linked with public
roads and railways with a travel time of 1 day. Then, from
1978 until 2006, the Taiwan Freeway had enabled movement
within five hours and starting from 2007, THSR has enabled
the same distance to be reached in 90 minutes. “The
13
HEADLINE NEWS
high-speed rail is the first massive investment in railway
transportation mode. A total of 220,9 billion Yuan (Rp 290,6
trillion) has been disbursed for the Beijing–Shanghai highspeed rail network and for the period 2011–2015, 2.8 trillion
Yuan will be budgeted for the development of 45,000
kilometers of high-speed rail network throughout China.
As a comparison, Indonesia now only has 6.714 kilometers
of railway network (year 2010). As a matter of fact, only
4,678 kilometers is being actively operated including the
3,333 kilometers of railway in Java and 1,345 kilometers of
railways in Sumatera. The minimum railway network in
Indonesia is straightly comparable to the minimum availability
of State Budget and Expenditure for railway sector which
is only Rp 4 trillion per year in average.
The ambience in a Shinkansen train, Japan; Photo: HD
economy in Taiwan island is now united,” the Vice Minister
of Transportation said.
At the beginning, THSR will be constructed and developed
using government fund. However, there is an anxiety that
I would burden the state finance which will potentially
increase the tax rate. Therefore, it was decided to develop
it under the Build-Operate-Transfer (BOT) scheme. The
construction of THSR is worth about USD 18 billion. Taiwan
High Speed Rail Consortium who won the tender in
September 1997 was granted concession rights for the
operation of the high-speed railway for 35 years and a
concession of 50 years for the operation of the railway
station.
CHINA HIGH-SPEED RAIL
Still in the Asian region, in concurrence with the 90th
anniversary of the China Communist Party, on June 13,
2011, China began operating its new railway train. CRH380A,
a high-speed train manufactured by China linked Beijing
with Shanghai (1.318 kilometers) for travel time of less than
five hours. Previously, it would take about 11 hours.
The two primary economic zones of China, Bohai and
Yangtze River Delta are linked by the high-speed rail. It is
also expected that high-speed rail will increase the economic
growth in those two regions. For five hour travel, the ticket
rate is 410 Yuan (Rp. 543,000) up to 1,740 Yuan (Rp 2.3
million). 220,000 passengers can be transported daily.
As quoted form the news agency Xinhua, the Vice Minister
of Railway Transportation of China Hu Yadong in Beijing
confirmed that the opening of the Beijing–Shanghai super
14
Interestingly, China is not only planning to develop highspeed rail in its territory, it has greater ambition as recorded
in the Article “China New Silk Railroad” written by Lee Chor
Pharn and Sim Phei Sunn in Global Asia Journal, Spring
Edition 2011.
As a matter of fact, China has a big dream to linking BeijingKunming-Delhi-Teheran (East-West Corridor) and BeijingKunming-Hanoi-Ho Chin Minh–Bangkok–Kuala
Lumpur–Singapore (North-South Corridor) with high-speed
rail.
The issue is, in the article, as quoted from the opinion of
Research Institute of Applied Economics in the University
of Barcelona; the rapid growth of high-speed rail in Europe
and Japan might not improve the economic growth. The
argumentation is, high-speed rail only relocates the centre
of growth. The cities through which high-speed rail is
constructed will enjoy the benefit, on the other hand, the
economy of the medium-class cities have been absorbed
to bigger and more dynamic cities.
“Some cities will win, and some will lose,” wrote Lee Chor
Pharn. This is true. Yet, the question is whether we want to
join in the Asian high-speed railway system in Asia, where
its development was initiated by China so we can enjoy
the benefits? Or would we just pull ourselves away from
the network?
ARGO CAHAYA
So, when will Indonesia build and operate its own highspeed rail?
It is a difficult question to answer. Building a high-speed rail
would need huge amount of investment. Besides, we still
have to import high-tech equipment which we have not
mastered yet. The infrastructures must be developed from
zero to prevent single railway intersections and to ensure
safety of the community living near the railway network.
“From long time ago, we have planned to build high-speed
rail Argo Cahaya from Jakarta to Surabaya. With a speed of
300 kilometers per hour, the travel time will be 2,5–3 hours,”
he said, who is also the Chairman of the Railway Forum of
the Indonesian Transportation Society, Djoko Setijowarno.
If we follow the road map study of the Indonesian railway
sector, it is theoretically assumed that Indonesia high-speed
rail start operating in 2020. The study has been prepared
by Japan Transportation Consultants as funded by Japan
Bank for International Corporation.
It is planned that Argo Cahaya will only stop in major cities
such as Cirebon, Semarang and Surabaya. “However, it is
not a cheap project. As a matter of fact, many infrastructures
are not built yet. About the rates, we will discuss it to avoid
expensive rate,” Djoko said.
Due to high investment for high-speed rail, it is inevitable
that the government will think of using APBN. Vice Minister
of Transportation signaled that Argo Cahaya can be realized
only through Public Private Partnership (PPP). “If any investor
is interested in developing Argo Cahaya high-speed rail, I
think the Ministry of Transportation should not wait long to
issue the permit,” Bambang Susantono said. While we are
still dreaming and studying, on February 2007, Vietnam
announced the commencement of the development of
Hanoi-Ho Chi Minh City High-Speed Rail project (1.630
kilometers). The investment will be 33 billion.
Why Shinkansen? Why not Les Trains Grande Vitesse (TGV)
manufactured by France or Inter City Express as operated
by German? INKA is closer to Nippon Sharyo, the
manufacturer of Shinkansen. Since its establishment on
August 29, 1981, INKA has been trained by Nippon Sharyo.
Japan was able to become a role model due to excess from
Japan’s loans through Overseas Economic Fund in the
amount of USD 525 million.
From the loan, 400 cargo cars have been manufactured.
While manufacturing, there is also transfer of technology.
The first generation workers of INKA were assigned to Japan
who among other include Roos Diatmoko who is now
working as the President Director of INKA. If high-speed rail
is to be realized, INKA will cooperate with Nippon Sharyo
to manufacture Shinkansen type N-700. Shinkansen can
transport 1,323 passengers in one trip which is equal to the
capacity of 12 Boeing 737,300.
Just like Taiwan High Speed Rail which is also operating
Shinkasen, is it true that we will also operate Shinkansen–with
the trademark Argo Cahaya? We are not sure yet. It depends
on the investor or more exactly, the way our government
can persuade the investors. (*)
It seems that this republic must act strictly like China and
even Vietnam. We must consider whether it is possible to
build high-speed rail using State Budget or to give a “red
carpet” to private investors to develop high-speed rail for
us.
Frankly speaking, many parties are impatiently waiting for
the realization of Argo Cahaya. The long check-in process
and congestion to Soekarno-Hatta Airport, has made so
many groups of communities long for high-speed rail from
the center of town in Gambir to Semarang or Surabaya.
Moreover, some parties actually have expertise but without
financial capacity. PT Industri Kereta Api (INKA) for example,
who has enthusiastically promoted high-speed rail. In one
of the corners at Indonesian Japan Expo 2008, INKA
demonstrated the Shinkansen bullet train simulation which
has been operating in Japan since October 1964.
Shinkansen train; Photo: HD
15
Until the end of 2011, coal
production of PT Bukit Asam
Tbk was targeted to reach 17,7
million tons higher compared
to last year which was 12,5
million tons. The increase of
transporting capacity of coal
railway is the key factor to
increase production.
Moreover, there is no other
transportation mode better
than railway to transport the
coal from mining sites.
In other words, there is symbiosis of mutualism between PT
Bukit Asam and PT Kereta Api Indonesia (PT KAI). No coal
will be sold if no coal railway is present from Tanjung Enim,
on the contrary, KAI will receive no substantial revenue
without the coal transportation contract.
The revenue from coal is so important for PT KAI. Moreover,
it should be understood that passenger railway will not
generate high profit. It is not surprising that PT KAI is even
encouraged to borrow funds for investment to purchase the
facilities and even to build the infrastructures.
In the near future, on July 2011, there was a commitment for
an addition of 40 units of coal cars. The facility aims to
increase the transporting capacity from Tanjung Enim (South
Sumatera) to Tarahan Port (Lampung) and Tanjung Enim to
Kertapati Port (Palembang, South Sumatera). On January
2011, there are two state-owned banks, BNI and BRI,
committed to provide loan in the amount of IDR 4,025 trillion
to PT KAI. The fund will be applied to finance the purchase
of 144 new locomotive units and 2,400 coal and cargo carts.
“Out of 144 locomotives, 44 will be allocated to Sumatera
and 100 to Java, while the cars purchased will consist of
1,200 coal cars and 1,200 cargo cars,” President Director of
KAI, Ignasius Jonan said.
From the previous order placed for locomotives, in September
2011, six CC205 locomotives are scheduled to be delivered
16
in September. While, from the ordered 20 CC 204 locomotives,
12 units have been delivered. “The remaining, eight units of
locomotives will be handed over in September, VP corporate
Communications of PT KAI Sugeng Priyono said.
The CC 205 series Locomotive is a powerful locomotive
manufactured by General Motors in Canada. The locomotive
is operated in countries especially to pull cargo cars. Tempted
by the huge profit derived from coal, PT KAI asked the
permission of the government to work on the construction
of double track in South Sumatera on its own. The
Government, in this matter – Directorate General of Railways,
Ministry of Transportation, has no adequate fund to construct
railway infrastructures.
In the initial stage, a 20 km double tracks railway will be
constructed from X6 Station in Prabumulih to Niru Station.
The first stage of the double track will be completed in
November 2011. In the next stage, the 20 km double track is
waiting for the detailed design. The 40 km long project will be
tendered this year so it could be completed in early next year.
PT KAI is also enthusiastic to develop and manage Srengsem
Coal Terminal in Lampung. However, the intention and step
undertaken by PT KAI has exhibited the presence of private
partnership to increase coal production of Bukit Asam State
Owned Enterprise. Its dividends will be used for state
development.
In Sumatera Island, there are plenty of coal potentials
which could not be explored due to limited transportation
facilities. In Riau, there is deposit of 15 million tons of
coal, in West Sumatera, there is 26 million tons, in Riau,
there is 36 million tons, and in Jambi there is 9 million
tons.
by using the road as the vein of human and cargo
mobility. On the other hand, coal exploration is facilitated.
Teras Narang does not only prohibit coal trucks to
operate, but to offer a solution in form of a coal railway
development project.
When we were about to transport 22.7 million tons of
coal in South Sumatra–there are actually a deposit of
2,65 billion tons of coal in the earth in South Sumatera.
Moreover, there 22.24 billion tons of coal in South
Sumatera.
PPP IN KALIMANTAN
BEST TRANSPORTATION
Lessons on how mining operations are performed in a
responsible manner must be learned from Kalimantan.
In other words, it is not only to enrich the company but
also empowering the local community. As a minimum,
it will not disturb the people around the mine.
Before the prohibition of coal transportation through
state roads in South Kalimantan in July 2009, the people
in South Kalimantan had experienced traffic difficulties
due to the damaged Trans-Kalimantan road in
Kandangan–Banjarmasin through which around 3,000
brick transporting trucks pass the roads.
The damaged roads are not only wavy or holed, but
there are also large holes in the middle of the road. The
size of holes is not only some square meters, but the
size of a truck.
In May 2009, the Provincial Government of Central
Kalimantan initiated the Puruk Cahu – Bangkuang Coal
Railway Project with length of 185 kilometers. This
project is offered under the Public Private Partnership
(PPP) scheme. The new Railway Law Number 23 Year
2007 permits the provincial government to tender
railway projects in the province.
This is the era of liberalization in the railway sector. It
is expected to realize the development of various railway
infrastructures. It must no longer depend on the
government to develop railway infrastructures.
The estimated funds required for the development of the
railway project in Central Kalimantan is USD 1.5 billion.
The concession offered is about 30 years with an estimated
economic internal rate of return of 279 percent. The
costs for land acquisition will be borne by investors as
part of investment. In spite of this, the provincial
government of Central Kalimantan is committed to support
the acquisition of 16 million square meters of land.
It is not a surprising that trucks must travel in days only
to reach tens kilometers. There were also cases where
merchants who were trying to get profit but only suffered
losses due to the demise of livestock transported by the
truck.
State funds disbursed for road asphalting is a waste
without trace. There is a classic cause, damaged state
road, and eroded asphalt by coal transporting trucks
and due to excessive load.
The strict stance of the Provincial Government of South
Kalimantan has urged coal companies to construct
industrial roads. If you travel from Banjarmasin–Batu
Licin–to Balikpapan, we can see coal roads separated
from state roads.
The governor of Central Kalimantan, Agustin Teras
Narang, is trying to protect the quality of roads in the
province. The objective is to maintain economic growth
PT Bukit Asam coal mining in South Sumatra. Photo: HD.
17
between the Provincial Government of East Kalimantan,
Ras Al Khaima Minerals and Metals Investment with an
investment of USD 900 Million. The 3rd railway track
from Tabang–Lubuk Tutung (185 kilometers), will be
constructed by PT Gunung Bayan with investment value
of USD 1 billion.
OBSTACLES IN COAL RAILWAY
There is a possible question, with abundant coal deposit
in Indonesia, why were coal railways not constructed
from long time ago? First, there the Railway Law was
not as liberal as nowadays. Secondly, there was no
preference to railway transportion.
Transportation of freight goods in Manggarai Railway Station, Jakarta.
Especially since 70 percent of the land required involves
state land.
Investors are requested to participate in the construction
of railways, bridges and signaling system and to build
station, service center, railway depot and coal loading
and unloading facility. The operation and management
is also subcontracted to investors in order for them to
build the system.
In Indonesia International Infrastructure 2011 Conference
and Exhibition in Jakarta Convention Center, on 14
April2011, the Governor of East Kalimantan, Awang
Faroek Ishak, also offered investments in the railway
sector for coal transportation.
East Kalimantan, is very rich of coal. Coal resources in
this province will reach about 19 trillion tons, distributed
in East Kutai Regency, Kutai Kertanegara, West
Kalimantan, Penajam Paser Utara, Berau, Bulungan and
Nunukan. The production is 150 million tons per year.
One of the first PPP projects offered in this Republic is
the railway in East Kalimantan. Even foreign investors
such as from United Arab Emirates, Ras Al-Khaimah
were successfully engaged. The investment released by
Ras Al-Khaimah for Muara Tuhup-Kalipapak–Kota
Bangun–Samarinda–Balikpapan (361 kilometers) reached
USD5 billion. .
The 2nd railway track from Muara Wahau–Lubuk Tutung
(150 kilometers) was implemented in cooperation
18
In North Sumatera for example, Crude Palm Oil (CPO)
Transporter Trains failed to compete with trucks due
to the lower rates offered by trucks. This is because
there is a subsidy for fuel for trucks while the industrial
engine fuel rate applies to the railway sector.
On July 2010, the Minister of Transportation applied
equal treatment to both the railway and land
transportation sector by equalizing the fuel prices. As
referred to in the Letter of Minister of Transportation
Number KA.005/1/5 Phb-2010, the Ministry of
Transportation plans to convert the mode of
transportation to railway. Based on data of the Ministry
of Transportation there is imbalance in the transportation
sector. At present, 92.23 percent of cargo is transported
by trucks and only 0,96 percent by railway.
“If the government wishes for better competitiveness
of the railway sector, we recommend exemption from
VAT for the railway sector,“ stated the President Director
of PT KAI Ignasius Jonan in his letter No.
KU.301/XII/39/KA-2010. Law No. 18 Year 2000 and
Government Regulation No. 144 Year 2000 regarding
Taxation define that land and water public transportation
is exempted from VAT, but VAT still applies to the
railway sector.
If there is clear competition between trains and trucks,
there should be an exemption from VAT, the process
of land acquisition for railways should be simplified,
and more PPP projects in the railway sector for coal
transportation should be granted. More coal can be
explored, under a condition that it is for the welfare of
the republic (*)
MINIMIZING TRAFFIC CONGESTION
Government Prepares Monorail Project
The transportation sector plays an important
role in promoting national economic growth.
Specifically, local transportation plays an
essential role in mobilizing the economy,
development and social activities of the local
community. A good transportation system is
expected to improve the local community’s
welfare.
Central and local governments have created a solution to
minimize traffic congestion in all major cities in Indonesia.
For example, the railway sector as set forth in Law Number
23 Year 2007 is designated to long distance land
transportation and congested areas.
In order to minimize traffic congestion, the government has
implemented several innovations including the operation
of Trans Jakarta and a mass transit system that uses a single
rail called monorail. Jakarta as the pilot project for monorail
development has received serious attention from the
government recalling that the project has commenced since
2004, but was terminated due to the considerable amount
of investments required.
The Coordinating Minister for Economic Affairs, Hatta Rajasa,
has recently confirmed that the government is ready to
provide financial support for the development of stalled
infrastructure projects due to lack of funds. “To resolve the
issue of traffic congestion in Jakarta, the government is now
ready to provide financial support to the Jakarta monorail
mega project,” he emphasized.
The total cost required for monorail development is USD
475 million or approximately Rp 4.5 trillion consisting of
rail construction totaling about USD 255 million and the
development of rolling stock, telecommunications and signal
which costs USD 220 million.
Funding support which has been disbursed by the
Government includes compensation payment for
construction costs amounting to Rp 204 billion to PT Jakarta
Monorail. Another contribution from the central government
is the financing of 42% of the total construction cost. Private
companies as investors are also engaged to fulfill the funding
needs through the Public Private Partnership PPP) program.
A number of foundation pillars for rail tracks along Asia
Afrika street, Gelora street to HR Rasuna street have been
erected since 2007. Some of these pillars have been
concreted while on the some other pillars, you can still see
the steel structures due to incomplete work. The government
only needs to continue working on the existing foundation
pillars for the construction of the monorail tracks. In the
future, the project will be fully assigned to the Provincial
Government of DKI Jakarta as the developer and operator.
19
Monorail pillars in Patal Senayan, Jakarta.
Based on the time of
implementation, construction
work will take place in 20112013 and the monorail is
expected to operate in 2014.
“The central government is
willing to provide assistance
because Jakarta requires roads,
trains including the acceleration
of the implementation of the
circle line. Now we are waiting
for action,” said Hatta Rajasa.
As a region aiming to become a world class city, it is now
the time for Jakarta to have its own monorail. Many people
consider that monorail is the most effective solution to cope
with traffic congestion in Jakarta. Another advantage is that
monorail is more environmentally friendly. Moreover, monorail
will reduce the rate of accidents since it has no intersections.
The monorail in Jakarta consists of two lines. Firstly, the
green line with a length of 14.3 kilometers, will run through
the triangle area routed Casablanca–Semanggi–Gelora Bung
Karno DPR/MPR Building-Karet Sudirman–Casablanca.
Secondly, the blue line routed Kampung Melayu-TebetCasablanca-Karet Sudirman-Cideng-Roxy spans for 12.7
kilometers. It is estimated that the monorail is capable of
transporting 270,000 passengers per day.
BANDUNG AND PADANG
As a matter of fact, not only Jakarta is planning to implement
the monorail system. The governments of Bandung city and
West Sumatera also have the same intention. Although the
cost is more expensive than busway since the government
must construct a separate line, monorail has added value
as it utilizes road width more efficiently. In addition, when
compared to other vehicles, the level of fuel consumption
is significantly more efficient. Likewise, it also emits lesser
quantity of gas compared to personal cars and buses.
In Bandung, the monorail is planned to be constructed for
11.2 kilometers long stretching from Northern to Southern
Bandung with 13 stations. The monorail will run from Dago
Bengkok to Pasirluyu. It will also be a part of the revitalization
project of Cikapunding River with a main target to revitalize
the river and reduce traffic congestion.
The monorail will be supported by 16 fleets ready to transport
10,000 passengers every 3-5 minutes. The total capacity of
passengers served will reach 26.8 million passengers in a
year. The total cost required for Bandung City monorail is
about USD 414.40 million. Assuming that monorail could
generate revenue of about USD 82.88 million. Thus, the break
even point of investment will be achieved within 5 years.
The Mayor of Bandung City, Dada Rosada admitted that the
Bandung City Monorail Project is urgently required to be
implemented to resolve traffic congestion in Bandung City.
He is waiting for policy and financial support from Bappenas.
”We will discuss it over later. We don’t know the distribution
of costs between the central and city government,” he said.
He has recently requested assistance from Bappenas for the
monorail project with an amount of Rp 500 billion.
Meanwhile, a number of foreign companies have expressed
their willingness to participate as a partner because Bandung
Monorail is considered to be a very potential investment.
Some of those foreign companies come from Malaysia,
Taiwan and Canada. A private company called Panghegar
Group was granted license to carry out construction work
including the procurement of budget and operation of
transportation services.
“Many foreign investors put their interest in the Bandung
Monorail Project. The matter of who will be elected as the
partner will be governed by the applicable rules. This will be
awarded through tender,” the Managing Partner of Panghegar
Group, Joko Cahyono said. Despite this fact, the realization of
Bandung City Monorail Project is waiting for a green light from
Bappenas.
Meanwhie, the monorail project in Padang is a plan of West
Sumatera Government in order to reform its mass transportation
system on an integrated basis. This project which will stretch
for 31 kilometers covers Bayur Port Bay, business center district,
government center, Minangkabau International Airport and a
few universities in Padang. This is also a part of the government’s
plan to realize Padang New City.
The estimated amount of budget cost for the project is USD
465.00 million. The preparation of this new project will
commence this year
and will be followed
by tender and
contract signing in
2012. Construction
work will start from
2012 to 2016 and
the monorail in
Padang is expected
to start operating in
2017 (*).
Monorail pillars in Rasuna Said Street, Jakarta.
20
PPP PARTNER PROFILE
PT Sarana Multi Infrastruktur (PT
SMI) was incorporated on
February 26, 2009 as an effort
made by the government to
promote the acceleration of
national infrastructure
development. PT SMI was
incorporated due to the
condition of the global economy,
the vital role of infrastructure
development in promoting
economic growth, financing gap
and the need to promote
infrastructure development.
As a company where 100% of its shares
are owned by the Ministry of Finance,
PT SMI is one of the government’s
effort to attract private companies to
invest in infrastructure programs. In
addition, the government has also
established Indonesia Infrastructure
Guarantee Fund (PT Penjaminan
Infrastruktur Indonesia (Persero)) and
coordinated with several countries to
seek for funding.
Acceleration aims to ensure the smooth
implementation of Public Private
Partnership (PPP) by revising policies
to favor PPP; regulatory reform which
includes general regulation on PPP,
procedures for obtaining government
support and guarantee and tax
incentives; the establishment of PT SMI,
PT Indonesia Infrastructure Finance (
PT IIF) and PT Penjaminan Infrastruktur
Indonesia (PT PII); and capacity
building.
The scheme of government support and
guarantee in PPP projects is illustrated
in the chart below.
PT PII provides guarantee for certain
investment risks to expand the project
opportunity of PPP projects and to
improve the security of private investors.
PT SMI and PT IIF provide funding
support for infrastructure projects. The
three institutions (PT SMI, PT PII and
PT IIF) play a role to accelerate the
development of infrastructure projects
through consultation services on project
feasibility studies, funding schemes and
et cetera.
They can also provide recommendations
to the Government of RI based on actual
issues in the form of fiscal policy, policy
reform and et cetera. In addition, the
three institutions have also conducted
socialization through forums such as
investor and infrastructure forums.
Through Decree of the Minister of
Finance No. 126/KMK.01/2011, the
government has assigned PT SMI to
support two infrastructure projects. Their
job is to facilitate the preparation of
PPP in the development of the
Soekarno-Hatta Airport–Manggarai
railway infrastructure and Umbulan
Water Supply, East Java.
In their presentation at IIICE 2011,
another project supported by PT SMI
in East Indonesia includes Air Terang
Modo Project in Central Sulawesi,
Tanjung Pinang Project in Gorontalo,
Murphy Semai Oil Logistic Plant Project
in Fakfak Regency Papua, MalalaTolitoli Project in Central Sulawesi,
Regional Irrigation Project in Sorong
Regency, West Papua and Stage IV of
the Marissa Project in Sorong Regency,
West Papua.
21
LEARNING FROM
THE IMPLEMENTATION OF PPP IN INDIA
Indonesia is actually already
familiar with and has been
implementing the Public
Private Partnership (PPP)
Scheme in the development
of infrastructures since 1990s.
Nevertheless, the government
has just realized that in the last
five or six years, to manage
the gap in infrastructure
funding, the participation of
private sector is required. In
the past, the government has
already applied PPP but in
such a sophisticated manner
that merely the elite could
receive an offer to implement
a project.
The economic crisis which struck most
countries in Asia in 1997 has materially
changed almost all aspects in Indonesia.
Political reform has created a new socioeconomic environment that caused
many PPP projects to be cancelled.
As a consequence, the level of our
infrastructures is poor. In the 2005–2009
National Midterm Development Plan, the
government realized that to attain the
22
targeted economic growth level of 7
percent per year, better infrastructures
are needed. Adequate infrastructures are
mostly needed for development.
In early 2005, the President announced
that the Government had no funds to
resolve infrastructure issues, thus, the
participation of private sector is a must.
Through the enactment of a Presidential
Regulation, the Committee for the
Acceleration of Infrastructure Provision
(KKPPI) was established. KKPPI is chaired
by the Coordinating Minister for
Economic Affairs with the Minister for
National Development Planning / Head
of National Development Planning
Agency as the executive chairman.
INDIA’S EXPERIENCE
At present, India is implementing its
infrastructure development program
costing more than USD 500 billion. As
a developing country, India is now the
focus of global investment. Domestic
investors and local developers are acting
as the locomotive for infrastructure
investment with an average Foreign
Direct Investment (FDI) totaling to 10
percent except in particular sectors such
as airport and seaport where FDI is
significantly higher. In addition, India is
relatively successful in managing all
aspects related to infrastructure
development under the scheme of
partnership with the private sector.
India and Indonesia have many
similarities. Both countries experience
a relatively stable economic growth
and are striving to maintain the level
of economic growth. With such
condition, Indonesia can learn from
India’s experience in the
implementation of PPP.
Examples of PPP project in India:
> Airport in Delhi, Mumbai, Hyderabad
& Bangalore
> Jaipur-Kishengarh and Delhi-Gurgaon
Toll Roads
> Mumbai and Hyderabad Metro
Railway
> Sasan(MP), Mundra (Gujarat),
Krishnapatnam (AP) and Tilaiya
(Jharkhand) Power Plants
> JNPT, Chennai & Tuticorin Container
Terminals
> 15 Container Railway Operating
Concession
> Power Transmission in Jhajjar,
Haryana
> 161 National Toll Roads (12,005 km)
> 137 Local Toll Roads (8,862 km)
> 22 National Ports and 57 Local Ports.
India, like Indonesia, is a democratic
country which has adopted the
decentralized government system. A
India will require large investments in network infrastructure, http://pppinindia.com
robust economy and substantial needs
of infrastructures for backup is required
to stimulate growth. As a result, the
participation of the private sector is
required to fulfill the large funding needs
to maintain growth momentum.
The experience of India in implementing
PPP is divided into four main categories.
First, the shift of paradigm for all
shareholders which has been successfully
conducted. Initiative reformation which
relies on universal leadership by the head
of government was also successfully
conducted. Infrastructure reformation in
India is led by the Cabinet Committee of
Infrastructure (CCI) and chaired by the
Prime Minister. PPP received wide
support from all government agencies.
India has the second largest road network in the
world, http://pppinindia.com
Second, funding for the provision of
infrastructures. Similar to Indonesia, there
is competition in demanding budget
resources for public programs such as
infrastructures, health, education and
rural development. On the other side,
budget allocation cannot be increased
more than 9 percent per year. In the real
condition, dependence on private
investment is unavoidable. In india, private
equity is not viewed as an obstacle and
the market has responded positively
towards it. Loan required by the public
sector and private companies is about
USD 247 billion in 11 years (2007-2012).
An annual growth of 12-15% for passenger traffic
has been projected, http://pppinindia.com
Unfortunately, bank loan period is less
adequate as their deposit account is short
or medium term. Differences in liabilities
and assets arise as serious problem
inflicting regulations on long-term
financing facilities by banks. Short Term
Loans will increase the cost (retribution)
and the bank must be very prudent in
transacting with the borrowers for project
funding.
Third, good governance. The typical
problems related to good governance in
India are the perspective of the ruling
officials, the reluctance to surrender
control in construction and operation
projects, objection towards ranking,
inability and inefficiency of projects and
bigger demand for PPP projects
compared to the existing supply.
One of the major steps taken by the
government to improve good governance
is the establishment of CCI which is
chaired by the Prime Minister. CCI is
supported by a PPP evaluation committee
that evaluates and provides
recommendations for all national PPP
projects for the central government. This
evaluation committee has completed 205
projects with an investment value of up
to USD 43 billion.
CCI is also supported by an
empowerment committee to evaluate
and approve proposals from state or local
governments to obtain funding due to
the Viability Gap Funding (VGF). This
committee has performed 65 projects
valued USD 11 billion.
Last but not least, the clear and
transparent procedure in PPP process.
For all stakeholders and most investors,
clear and transparent documentation of
PPP is highly essential.
PPP GOOD GOVERNANCE
In India, PPP has been integrated into
the planning process. Ministries still play
their own roles, but maintain coordination
with CCI to develop and implement
world class infrastructures. Coordination
among ministries and multidiscipline
dialogs are carried out to enrich the results
and to minimize potential conflicts.
Consultation with stakeholders, including
users and investors must be accompanied
with the simplification and standardization
23
of documents and processes of PPP
implementation.
The government continuously promotes
the creation of a lucrative environment
for private investments. In supporting
this, a standard document to accelerate
the flow of investment and to ensure
competitive and adequate services is
used. The improvement of the
implementation of PPP also utilizes
budget and Loan/Grant. It also includes
the acceleration of PPP project
preparation and long term funding
support for the infrastructure sector. The
aim is to provide world class infrastructure
service.
In order to develop the capacity of human
resources involved in the PPP scheme, it
is necessary to see successful examples
of PPP projects, resource persons with
broad and in depth knowledge, a clear
concept and procedure for PPP process
either domestic or overseas. The
government must provide trainings
starting from decision makers at the upper
levels to field technical operators.
It is also necessary to strengthen the
correlation between disciplines in
scientific studies where its
implementation is expressed in the
Project Development and Management
document including the feasibility study.
It is also necessary to carry out an in
depth study on infrastructures and
financial institutions. At the conclusion,
it is necessary to seek comprehensive
solution for the people and private
investors.
KEY FACTORS TO
THE SUCCESS OF PPP
The key factor to the success of PPP is
the commitment of the highest authority
(President or Prime Minister) which is
implemented in the form of government
support through Viability Gap Funding.
The source of funding of VGF derives from
24
There has been a significant uptrend in domestic and international air travel, http://pppinindia.com
the central and state government budget
where each provides a maximum of 20%
of the project cost payable upfront. The
management of this financing facility must
be carried out by the Empowered
Committee under the authority of the
Minister of Finance who will evaluate and
approve the request of National PPP
Projects who wish to secure VGF.
India requires an additional 100,000 MW of
generation capacity by 2012, http://pppinindia.com
The central government provides security
for regional PPP projects as credit
enhancement to build and improve the
trust of banks in project funding. The
government also provides long term
subordinate loans such as quasi equity
to reduce mismatch with commercial
banking which does not provide long
term loans.
In addition, the government also provides
other incentives such as tax holidays,
import tax exemption for particular
equipments used for infrastructure
development, loosen the regulation
regarding the limitation of the
participation of foreign investors and et
cetera.
As for land acquisition for toll road
projects, NHAI (National Highway
Authority of India) acquired approximately
80 percent of land. Previously, it was
fixed to 50 percent before the
construction of projects. The remaining
will be completed during the construction.
The government applies strict selection
for projects. The aim is to shorten and
simplify the appraisal and approval
process for PPP project. For such
purpose, the PPP Appraisal Commitee
(PPPAC) is chaired by the first echelon
official of the Ministry of Finance and
its members comprise of first echelon
officials of the Planning Committee and
other Ministries.
PPP project proposals will be evaluated
or assessed by the Planning Commitee
and the approval will be issued by
PPPAC. PPPAC will only approve
financially feasible national PPP project
proposals. This means that projects have
high level of demand and wide
commercial prospect will be approved.
In general, India also struggle to
implement PPP. In order to reach the
objectives of infrastructures provision for
improved development, Indonesia must
follow the way of other countries. As an
illustration, India is a good example for
us to learn. (*)
References:
> “Public Private Partnership (PPP) in
India: Lessons Learned for PPP in
Indonesia”, Directorate of Public
Private Partnership Development,
Bappenas.
> “Learning from India’s PPP”, by Eko
Wiji Purwanto, Jakarta Post, 15 April
2011.
FIGURE
President Director of PT KAI Ignasius Jonan
RAILWAY ISSUES
BECOME MY HOMEWORK
Working at PT KAI (Persero)
is a new experience for
Ignasius Johan. However, we
should tolerate this since he
has always dealt with banks.
He was the President
Director of PT Bahana
Pembinaan Usaha Indonesia
(2001-2006) and managing
director of Citigroup (20062008). Jonan, being his
nickname, was appointed by
the State Minister for State
Owned Enterprises as the
President Director of PT KAI
on February 25, 2009.
“I used to deal with bankers, but now
I have to manage passengers. I used
to spend my days in the bank, but now
in the railway station. So funny isn’t it?
He joked. “What should I do next? This
is the government’s decision, I have to
take it,” he added.
I will continue the targets set by the
former Board of Directors,” expressed
this man who was born on June 21,
1964, winner of Sanggraha Krida trophy
from Minister of Sports and Youth in
2010 in Jakarta.
According to Jonan, discussing about
railways will be very complex as there
are many related aspects. The
government aspect acts as regulator,
the train and rail aspect acts as
infrastructure – including railway tracks
– the station aspect acts as supporting
infrastructure until the community
aspect as the end user of railway
services. All aspects will need serious
attention and synergy.
many objectives by creating sense of
security, punctuality and convenience,
it is not, however, an easy job. It
requires careful and attentive measures.
Now, how can Jonan deal with such
situation? ”I already told you many times
that it could not be dealt at once. At the
moment, we are focusing on the
improvement of services, security and
punctuality. When this can be realized,
we will then begin to handle other
aspects,” affirmed the man who attended
The commitment of the Government
to create railway as mass transportation
with satisfactory services will cover
Jonan is not the follower type. Despite
having little experience in the railway
sector, he is a strongly motivated person.
He seriously studied information on
policy, regulation, development and
condition related to railway sector. There
is a simple consideration behind this.
“How can I make decisions if I
understand nothing,” he said.
As a result, albeit his different
background, he could professionally
manage PT KAI. ”The important thing is,
25
FIGURE
Commuter line in Depok station, West Java.
the Senior Managers in Government
Program at Kennedy School of
Government, Harvard University, USA.
The first simple thing is the appearance
of trains. If trains appear nice, without
graffiti on its walls has clean toilets and
stations, it will create a satisfactory first
impression in the community. The
appearance of the train is one of the
important aspects in services.
It is unavoidable that the first measure
adopted by Jonan is the cleaning of
dirty trains. This can be seen from the
trains which look cleaner now. The
station now looks tidier and cleaner.
Safety is an important element since it
is could affect the company’s image.
Whatever the services, if accidents still
occur, this will mean nothing.
Therefore, Johan always reminds the
operators to perform their duties in a
professional manner.
intended to enable each division to
work with focus and more optimally.
Public Private Partnership (PPP) scheme
in the provision of infrastructures.
Furthermore, what about infrastructures
at present? Jonan admitted that it is not
a wrongful mindset that trains are used
for long distance transportation.
However, nowadays, the problem of
traffic congestion has become more
severe. Hence, trains must also serve as
short distance transportation. ”The term
is commuter, which is operated within
the city,” he explained.
On the other side, KAI is still surrounded
by classical issues to which a solution
must be sought such as the traffic flow
during Lebaran day, minimum fund
allocation for Public Service Obligation
(PSO) to operate economicclass trains
and issues related to financial losses
sustained by the company. Jonan
admitted that this is his “homework”
which must be completed.
PT KAI will immediately construct the
Soekarno Hatta Airport–Manggarai
commuter project. This step is taken to
minimize traffic congestion in the city of
Jakarta and toll road to the airport. The
double railway track of Duri–Tangerang
will also be constructed.
“Those are listed in my agenda.
However, my obsession is how the
railway sector, with support from all
relevant stakeholders, could become
a mass transportation which one could
be proud of due to its exceptional
services, safety, and provide satisfaction
to everyone,” Ignasius Johan added.
”We have coordinated with the
relevant parties”. We have made the
preparations,” he said. The
development of Soekarno
Hatta–Manggarai railway commuter
with a length of 7 km will require
investments of about Rp 2.25 trillion,
while the double track railway of
Duri–Tangerang with a length of 19.31
km will require double amount of cost.
It is planned that the realization of the
projects will be carried out under the
In general, another major homework is
to make cargo transportation as an
alternative primary service of PT KAI.
Aside from being cheaper, this will also
prolong the life of roads which are
usually damaged due to passing heavy
vehicles. Just imagine, at present, more
than 92% of cargo is transported by
truck yet those transported by train is
less than 1%. It is definitely not an easy
homework. (*)
“If safety is achieved, punctuality must be
achieved as the second priority. Thereafter,
services and comfort,” he said. One of
the disaster prevention steps is to enforce
the No Go Item policy which obligates
fleets to comply with standards.
Another breakthrough made by this art
collector is to separate PT Komuter
Indonesia and appoint it as a subsidiary
of PT KAI that specifically handles
railways in Jabodetabek. This is mainly
26
Situation of special railway coach for women in Jakarta.

August 2011 Edition

Transcription

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