Indonesia Railway ReformSuyono Dikun, PhDProfessor in Transport Planning and PolicyUniversity of Indonesia at Depok

IndII Wrap-up Conference14th June 2011

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National Railway Master Plan 2030

Region NRMP Length of Tracks (km)

Passengers (millions)

Freight (million tons)

Jawa 595.0 4,031.5 6,800

Sumatera 27.5 281.5 2,900

Kalimantan 6.5 20.5 1,400

Sulawesi 16.0 31.5 500

Papua 15.5 2.0 500

Total 660.5 4,367.0 12,100

National Railway Master Plan - 2030 Projections

National Railway Master Plan 2030

Region Locomotives (units) Trains Railcars

Passengers Freight

Jawa 1,790 7,600 17,890 151,870

Sumatera 90 530 810 10,590

Kalimantan 20 80 190 1,530

Sulawesi 50 120 470 2,380

Papua 50 30 50 470

Total 1,960 8,360 19,410 166,840

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Indonesian railway at a crossroads

Current Railway System

FutureRailway System

Legal Path following Law no. 23/2007

“De-Facto” Path staying

at current vertical

integration

Can a compromise or an interim solution be worked out between the regulator and operator?

Revitalisation

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No compromise: Regulator

Rail Infrastructure Company (Track

Authority)

Operation and Rolling Stock

Company

Asset Separation

Network Statement

Upgraded Accounting System

Multi Operators Jabodetabek Rail Company

Urban Railways

Financial Support

Legal Path Full compliance with Law no. 23/2007

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No compromise: Incumbent Operator

North Sumatera

Rail

West Sumatera

Rail

South Sumatera

Rail

Jawa Rail

Stay at current vertical integration

PT KAI will still operate the existing railway system under vertical integration but has more freedom to invest on both infrastructure and rolling stocks.

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National Railway Master Plan

April 2010, August 2010

Jabodetabek Railway

Restructuring Programs October 2010

Special Railways Phase II

February 2011

PSO-IMO-TAC Frameworks

Phase IMarch 2011

Special Railways Phase III (on-going)

June 2011

IndII assistance

IndII has made a lot of policy recommendations on these studies

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Lessons learned: The good newsRailway stakeholders (DGR, Bappenas, CMEA, MOF) have agreed on the urgent need to revise the current PSO-IMO-TAC scheme.The new framework would make the existing scheme work better. The new framework would enable multi operators and private special railways to become a reality in future railways.IndII’s next involvement would probably include assistance with establishing new framework for the PSO-IMO-TAC scheme.

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Lessons learned: Pending mattersRevitalisation and restructuring agenda for Jabodetabek Metropolitan Railway is yet to be confirmed by the government.The agenda includes: the enhancement of PT KCJ to be an independent urban railway company; asset separation; network statement; and financial support.The corresponding issue of raising ridership up to three million passengers per day in 2015 and beyond has been endorsed by the government.DGR has to be strengthened institutionally to be able to make a rapid delivery.

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Lessons learned: The bad newsThe NRMP has been formally issued as a long-term planning document but failed to incorporate many strategic issues that had been reported in two IndII’s papers.The NRMP lacks a sound investment plan for the next one or two decades.The NRMP has no mention on the investment strategy, financing, and the role of private involvement including PPP and PFI for special railways.Even for government investment and public sector spending the NRMP has not described the future configuration of APBN funding.

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ProposalsIndII would probably embark on the second stage of infrastructure agenda beginning July or August 2011.Despite the good news described above, it is strongly suggested that government takes a strong lead and ownership in any program of railway revitalisation ahead.It is a developed and modern Indonesian railway that government would like to see in the years ahead as a backbone for economic mobility, especially freight movement.Good enough is no longer enough. Indonesia needs a rapid change towards a developed economy.