The views expressed in this presentation are the views of the author and do not necessarily reflect the

views or policies of the Asian

Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent.
ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use.
Terminology used may not necessarily be consistent with ADB official terms.

Presented by:
Rizki S. Saputro and Muhamad Yusuf
Directorate of Loans and Grants, Ministry of Finance

Overview
Largest Archipelago
> 13,000 islands
Stretched 5500km

(London-Tehran)

Almost 100,000km

coastline (2x earth circ.)

Around 1000 ethnic

groups with 700 native

lingo

Home to the 238 million

people, almost half of

them are in the labour
force (half in urban and
half in rural) with 2.8
million of unemployment
(2010 Census)

Most of them are living in

Java and Sumatra islands.

 Indonesias transport system is

adapted to connect Indonesian

archipelago

It is shaped to accommodate the

flow of people and goods for the

population which highly
concentrated in Java and
Sumatra.

Modes of transportation are:

Motorcycle (114.2 mil.veh., 2014)

Car (18.9 million veh., 2014)

Bus (2.4 million veh., 2014)
Train (1 million psgr./day, 2015)
Airplane (130k psgr./day, 2015)
Ship/Boat (122k psgr./day, 2014)

(Statistics Indonesia, 2016)

 Road (517,663 km, 2014)

Asphalt 295,968km
Non-asphalt 221,695km
Toll-road 1,664km; will expand 1,060km more in

2019.

Bus services are available in most areas

connected the cities, with taxis for privatehire.

Angkot which is minibus or minivan in small

towns or remote areas.

Small vehicle for hire includes motorized auto

rickshaw or Bajaj (like TukTuk in Thailand).

Motorcycle, called OJEK, and Tri-cycle
rickshaw, called becak.

Pseudo-legal Online transportation: GOJEK,

UBER, GRAB, etc.

 Each of the major islands having at least

one significant port city

Total 37 Ports are managed by the

various Indonesia Port Corporation

Inland waterways relatively minor and

limited to certain areas of Eastern

Sumatra, Kalimantan and Papua

JOKOWI administration promotes SEA

TOLL to connect the islands, especially

the eastern part of the country.

Expansion plan:
Billions of USD is
capped to buy cargoship, traditional ship,
and pioneer ship.
Another billions to
upgrade 24 ports and
build 4 new strategic
ports.

 Indonesia has more than 200

airports (53 for commercial).

Most of them operated by

Ministry of Transportations
technical operation units and
State-owned company.

Indonesia will have 15

new airport terminals

in 2019. Six of them
are strategic.

Compared to railway

investment, building a
new airport is quite
cheap (equal to 1 km
of elevated rail road
in Jakarta)

 The majority of Indonesia's

railways is located in Java and

Sumatra.

Mainly, track/railroad is inherited

from the Dutch colonial era.

By law, railroad infrastructure is

owned by the Government.

The new law has enabled private

investment to cooperate with the

Government in building and
operating the railway.

Technically, the railroad is on

1,067mm gauge.

At least 8,159 km of railroad track

is laid in all over Indonesia. Only,

4,816 km are active , while the
rest of 3,343 km is dormant.

Around 400 km of the rail network

is electrified (1.5 kV-DC) for local

commuter services in and around
Greater Jakarta.

COMPARISON OF RAIL NETWORKS AND DEMOGRAPHIC/ECONOMIC FACTORS

(SOURCE: INDONESIA INFRASTRUCTURE INITIATIVE, 2010)

Island

Popul
ation

Pop.
Area
Densi (km2)
ty/km

Rail
Rail
Length Psgr.
modal
share

Rail
Freight
modal
share

GDP
per
capita

Java
Island

124 M

935.6

138,794

3,425

7.3%

0.6%

3,900

Honshu,
JP

103 M

451.8

225,800

22,000

28.7%

5.2%

34,100

62 M

538.9

209,331

16,000

5.4%

5.7%

36,700

Great
Britain

The Law no.13/1992 unable to cope with the necessity to grow.

With support from the World Bank, the policy was reformed. The
Government issued Law no. 23/2007 which compels both the restructure
of PT Kereta Api (state-owned railway operator) and the promotion of
private sector involvement, including possible sale of state assets,
concessions granted through the PPP initiative.

Restructure PT Kereta Api

Before

After

 Strategy in the National Railway Master Plans (NRMP) is

required by Law no. 23/2007. The strategy is to achieve a world

class railway system by 2030.

Forecast for 2030 railway infrastructure and means of transport:

Lay 12,100 km of Railroad track.
Build new or buy used rollingstock.
National Railway Master Plan 2030
Region

Passengers
(millions)

Freight
(million
tons)

Length of
Tracks
(km)

Passengers

Jawa-Bali

858.5

534.0

6,800

2,585

1,010

25,825

20,115

Sumatera

48.0

403.0

2,900

145

760

1,435

15,170

6.0

25.0

1,400

20

80

185

1,525

14.5

27.0

500

50

120

470

2,375

1.5

6.5

500

25

45

470

929.5

995.5

12,100

2,805

1,995

27,960

39,655

Kalimantan
Sulawesi
Papua
Total
Investment
need.

Approx. USD 34,050 million

Locomotive

Carriage

Freight

Passengers

Freight

Approx. USD33,169.5 million

 According to the Law No.23/2007, the government is only

responsible for the construction and maintenance of the main

infrastructure (track works, electification, signal system).

For the Operation of railway, the PSO-TAC-IMO System is

adopted.

The operator(s) of railway system pays TAC (Track Access Charge)

and IMO (Infrastructure Maintenance and Operation) to MoT.

The government (MoF) gives PSO (Public Service Obligation) as a
compensation for the service provided by the operator(s).
To finance the 2030 projection, the government will need

USD67,219.5 million. It is hoped that the private sector will be

interested in funding the 70% while the government will use
the state budget to finance the 30%.

The PPP is the legally provided investment scheme at the

moment. While the government will use tax money, loans,

grants, and bonds to finance that 30%.

 There are 8 projects offered to be financed by PPP:

Soekarno-Hatta Airport to Halim Perdanakusumah Airport railroad.
Bandung Light Rail Transit (LRT)
Integrated Gedebage Multipurpose Terminal
Palembang Monorail
Batam Island Monorail

Muara Enim (South Sumatra) to Baai Island (Bengkulu) railroad

Puruk Cahu to Batanjung via Bangkuang railroad (Kalimantan)
Operation and maintenance of Jabodetabek LRT (replacing Jakarta

Monorail project)

Only one project has completed the procurement process. i.e.

Purk Cahu to Batanjung via Bangkuang railroad in Kalimantan.

Other projects are financed through government budget to

entice investors. Such as Soekarno-Hatta Airport to Manggarai

station railroad, wherein the rollingstock and operation will be
offered to private sector.

 INTERNAL
Poor coordination inside the government (between department/unit).
Human resources capacity: delays in permit issuance.
Land acquisition procedures have led to major delays for even those

projects where funding was available.

Private investors discouraged from participating in publicprivate
partnerships.
EXTERNAL
Natural disaster: Flood, Earthquake, Landslide, etc.
Inter-mode competition: Airplane, Bus rapid transit (BRT), sea-toll.

Regional autonomy: City plan, Investment regulation/red tape, local

industry competitiveness.
Technology decreases people movement.

 Strategy in the National Railway Master Plan (NRMP):

Transportation is directed to support economic, social , cultural and

environmental activities and developed through regional development
approach in order to achieve balance and equitable development

Improved publicprivate partnership scheme

Greater access to government guarantees.
new Viability Gap Funding arrangements.

Greater flexibility to bundle different types of project.

New Law
The Indonesia government introduced outlined clear work responsibilities of
each assigned institution, stipulated timelines, structured an accountable
appraisal mechanism and facilitated land rights revocation processes.
New Platform to improve business climate
In January 2015, the Indonesia Investment Coordinating Board launched a single
platform for investors to apply for permits online, eliminating the past
coordination problems between different ministries or institutions.
Further steps are being taken to eliminate overlaps, thus shortening the

application timeline.