Transport
From The Report: Indonesia 2014
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For an archipelago spread over more than 17,500 islands and spanning 5,000 km from west to east, the need for Indonesia to have an efficient transport network that seamlessly integrates sea, land and air transport systems is clear. The public sector manages 90% of total transport infrastructure, while private sector involvement is concentrated on a few tolled highway projects and private rail lines. By 2014 Soekarno-Hatta International Airport is expected to be able to handle 64m passengers annually; however, passenger demand is expected to soar to 87m by 2025. Indonesia has much to improve in the transport sector, which already comprises 40% of infrastructure investment. Deeper focus on development of the country’s transport networks is necessary for improving travel connectivity and reducing the cost of doing business throughout the archipelago.
This chapter contains interviews with Emirsyah Satar, CEO, Garuda Indonesia; Sukmawati Syukur, President Director, Monorail; and Djarwo Surjanto, President Director, Pelindo III.

Articles from this Chapter

Overview

By land or by sea: Private sector involvement could help integrate the transport network
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For an archipelago spread over 17,500 islands and spanning 5000 km from west to east, the need for Indonesia to have an efficient transport network that seamlessly integrates sea, land and air transport systems is manifestly evident. The transport sector is the backbone of the economy, accounting for more than 40% of overall infrastructure investment. Yet Indonesia fares poorly when it comes to the quality of its transport infrastructure. Failure to invest adequately in ports, airports and roads…

Interview

Emirsyah Satar, CEO, Garuda Indonesia: Interview
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Interview:Emirsyah Satar What will the revision of Indonesia’s GDP figures for 2013 mean for the aviation sector in 2014? EMIRSYAH SATAR: The country’s GDP output for 2013 may have been revised down farther than some expected, but growth prospects for aviation remain positive. While a lower GDP will indeed correlate in some way, the most urgent challenge for Indonesia’s aviation sector is infrastructure. Future growth in market size and demand is guaranteed. The challenges include hard…

Interview

Sukmawati Syukur, President Director, Monorail: Interview
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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.…

Analysis

The promised land: Difficulties around land acquisition remain a significant challenge
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Investors will risk capital on long-term projects only when they expect to capture adequate returns from their investments. However, they will only do that if they can forecast, with some certainty, the length of time it will take to complete such projects. Since 1993, the Indonesian government has promulgated various regulations on land acquisition hoping this will encourage investors to make long-term commitments to infrastructural projects. Challenges The reluctance to fast-track land acquisition…

Analysis

Prioritising ports: The modernisation of ports is a prerequisite for economic expansion
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Sea transport is vitally important to Indonesia. The archipelago nation’s maritime zone covers 7.9m sq km, almost four times its land area. While coastal shipping accounts for about 7% of total national freight and passenger movements, 90% of Indonesia’s external trade is conducted through seaports. Between 2005 and 2010 container throughput increased by 11%. Despite this double-digit growth, Indonesia’s ports handle no more than 10m twenty-foot equivalent units (TEUs) of cargo annually –…

Analysis

Seizing momentum: Shortcomings in infrastructure supply are gradually being addressed
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The government is addressing challenges relating to a lack of high-quality infrastructure by encouraging public-private partnerships (PPPs). Infrastructure investment has lagged in recent years, averaging 3-4% of GDP since 2000, well down on the 7% or more from before the Asian financial crisis in the late 1990s. While recent years have seen some spikes, notably in 2009 and 2010, when infrastructure investment averaged close to 6% of GDP, spending has again fallen back to 4%. The cost to the economy…

Interview

Djarwo Surjanto, President Director, Pelindo III (PERSERO): Interview
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Interview:Djarwo Surjanto How will the creation of the Teluk Lamong terminal and the Java Integrated Industrial and Port Estate (JIIPE) affect the economy of East Java? DJARWO SURJANTO: The development of the Teluk Lamong terminal will go a long way toward improving Surabaya’s overall port capacity. Other than the boost in capacity, Teluk Lamong represents the future standard for the nation’s ports due to the fact that it is an entirely green terminal. We agreed with Organda, the national…