1. Indonesia Railway Reform Suyono Dikun, PhD Professor in Transport Planning and Policy University of Indonesia at Depok IndII Wrap-up Conference 14 th June 2011

2. 2 National Railway Master Plan 2030 RegionNRMPLength of Tracks (km) Passengers (millions) Freight (million tons) Jawa 595.04,031.5 6,800 Sumatera 27.5281.52,900 Kalimantan 6.520.51,400 Sulawesi 16.031.5500 Papua 15.52.0500 Total 660.54,367.012,100 National Railway Master Plan - 2030 Projections National Railway Master Plan 2030 RegionLocomotives (units)TrainsRailcars PassengersFreight Jawa1,7907,60017,890151,870 Sumatera9053081010,590 Kalimantan20801901,530 Sulawesi501204702,380 Papua503050470 Total1,9608,36019,410166,840

3. 3 Indonesian railway at a crossroads Current Railway System Future Railway 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

4. 4 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

5. 5 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.

6. 6 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 I March 2011 Special Railways Phase III (on-going) June 2011 IndII assistance IndII has made a lot of policy recommendations on these studies

7. 7 Lessons learned: The good news Railway 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.

8. 8 Lessons learned: Pending matters Revitalisation 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.

9. 9 Lessons learned: The bad news The 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.

10. 10 Proposals IndII 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.