Interview: Sukmawati Syuku
What has traditionally held back the development of rail infrastructure in Indonesia?
SUKMAWATI SYUKUR: In the past, unnecessary bureaucracy has hindered the development of many rail projects. The regional and central government need to better coordinate their goals and activities. The local governments have limited resources and need to have their plans subsidised while the central government has a full plate and therefore actions are sometimes slow to materialise. Both entities need to find a happy medium in dealing with one another. Having said that, relying solely on the government for help is hazardous. The private sector should be the driver of development. We want to show that the private sector is capable of handling modern infrastructure challenges.
In light of this, Jakarta is now about 20 years behind the regional curve in terms of its urban transportation. Demand is high and supply is barely existent. In Bandung, tourists come from all over the region, including Jakarta; however, travelling there is a nightmare. There is currently a direct flight there, so why can we not travel by rail? Traffic is unpleasant, and it is hurting our economic development.
The government needs to deregulate the sector in order to incentivise investors. We need to lay out the red carpet and be more inviting. In the end the people are the victims of bureaucracy and red tape.
In what ways does congestion affect the city’s economy?
SYUKUR: In 2007, we calculated that congestion costs our green and blue line zones approximately $200m. If we were to extrapolate those figures forward to 2013, the costs are estimated to be closer to $1bn. The amount of time that people spend commuting and away from their work places is staggering.
We have an ambitious plan for the monorail system, which includes 30 stations to be connected to commercial buildings throughout Jakarta. The challenges to developing and implementing the monorail will not be easy to overcome; however, the rewards and benefits to the city will make the efforts worthwhile. Our investors have fully supported us and have given us confidence moving forward.
What will be the indirect or knock-on effects of the monorail project for Jakarta?
SYUKUR: According to our property advisor, the land around the monorail is set to triple in value upon project completion. Therefore, people with sufficient assets are starting to invest in nearby properties.
We are modelling our system on Thailand’s BTS Group. The firm in Bangkok went public and was able to raise $2bn. With that money they started to develop a new monorail line. Similar as well to Bangkok, we are considering a spin-off media business to capitalise on the advertisements throughout the stations.
People will have easier access to the Jakarta CBD area. Our green line means that people can travel here from all parts of Jakarta. The monorail will provide for clean, efficient and timely travel. Without the monorail, travel times become unreliable and unpredictable. Traffic sometimes means that people can travel up to two and a half hours.
How did you find a price point for tickets?
SYUKUR: We hired a Japanese consultancy, which found that ticket prices cannot exceed Rp10,000 ($1) in order to attract the desired 250,000 users per day.
We project that total capacity will be around 600,000 passengers per day, which we will predict will happen between 2020 and 2025. Once this occurs, we will have to discuss the creation of additional routes.
Unfortunately our demand model didn’t consider the introduction of the Low Cost Green Cars programme, which is set to flood the country with cheap cars. The policy is completely against our ethos of improving the environment. There are already 1000 new cars and 5000 new motorbikes being added to the roads every day. This needs to be curtailed.
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