1. Development of Multimodal Transport in North Java Corridor Scoping Study

2. 2 Study focus Development Theme Driver for national industry and services provision Economic centres Jakarta Bandung Semarang Yogyakarta Surabaya Main economic activity Food and beverage Textile Transportation Equipment Shipping ICT Defence Equipment Greater Jakarta Area “to ensure that the infrastructure, services and facilities that are provided in the Corridor meet the needs of the users of the transport system, and especially the needs of main economic activities of the corridor as identified in the MP3EI”

3. 3 Study context National Logistics System Multimodal Transport Strategy NRMPNPMP Road system plans

4. 4 Mode choice in principle DistanceFlow concentrationCargo valueCargo perishability/fragilityCargo density Road Rail Sea Low High Low High Low High

5. 5 Domestic container movements by sea (Java)

6. 6 Geographical Pattern of Intra-Java Freight Flows

7. 7 Existing rail freight task (Java) – excl coal. Source: KTPA, 2012

8. 8 Key Obstacles to Efficient Multimodal Freight Transport in the Java Corridor GROUPKEY ISSUES ROAD ISSUES Slow delivery of expressway system Overloading Congestion Suboptimal road investment prioritisation Distortion due to fuel subsidies RAIL ISSUES Lack of network capacity Limitations on train weights and dimensions Lack of competition MARITIME ISSUES Limited port capacity High port access costs Unreliable port performance High cost and unreliability of domestic shipping services MODAL INTERCONNECTIVIT Y ISSUES Poor rail access to port terminals Scarcity and poor performance of intermodal terminals Lack of intermodal focus in planning and system management

9. 9 Some surprises Truck costs are not as high as expected relative to other modes. This reflects fuel subsidy, lack of RUC and probably high level of overloading Truck travel times are not as low relative to other modes as in other places. This appears to reflect traffic congestion and restrictions on truck operation in cities. Some high value goods which we would normally expect to travel by truck are shipped using sea mode (for security reason), i. e.: electronics and car Some low value goods that seem natural targets for rail travel by road: for example, around 300 trucks each carry 30 tons of coal daily from Cirebon to Bandung for textile factories around Bandung.

10. 10 Targeting the right cargoes CommodityComments Existing bulk trafficsNeed to avoid complacency SteelKrakatau steel already sends cargo by both rail and sea, and is interested in increasing non-road share. Also significant growth with the Posco Krakatau steel development. Port-related containers Pressure on landside access to ports will make increased use of rail imperative. Also port-related movement tend to be better suited to rail because there is not – or need not be – a truck distribution leg at the port end. Niche bulksRail already has a position in many bulks, but some customers – e.g. cement – have an interest in increasing their use of rail Java-Sumatra freight The need to make the Straits crossing, congestion at the ferry and relatively long distances make this trade a priority target for ro-ro shipping services AutomotiveA more difficult target for rail, but at least one major manufacturer is interested in considering and rail is quite widely used in other countries. Jakarta-Surabaya general cargo It will be difficult for rail or sea to be sustainably profitable in these cargoes, but both rail and sea currently play a minor role in the carriage of these cargoes. Double-tracking should improve competitive position of rail. Low hanging fruit More difficult

11. 11 RIGHT infrastructure and services Immediate (before 2014) Complete Jakarta-Surabaya double-tracking Improve access links to major ports Improve facilities for handling motor vehicles at T Priok Promote use of full potential of existing intermodal terminals Develop common user terminal at Cilegon Develop Cikarang-Surabaya rail services Medium term (2015-2019) Provide additional container capacity at T Priok and T Perak Ensure all new terminal developments have high quality road and rail access Create network of intermodal terminals/dry ports Expand ro-ro services between Sumatra and Java Develop specialist rail services for automotive industry Longer term (2020 and beyond) Create freight only rail links in congested section of the network Increase structural strength of key rail freight links

12. 12 The RIGHT supporting policies Immediate (before 2014) Set and monitor KPIs for cargo handling performance at key ports Adopt new road design standards for all of strategic freight network Formally establish peak logistics industry consultative body Remove fuel subsidy for heavy diesel fuels Define and implement rail track access charge Foster competition in container terminal services Modernise PTKAI rolling stock (commence) Adopt point-of-origin approach to enforcement of vehicle limits Further streamline customs clearance procedures Intensify congestion management efforts in major cities Include multi-modal transport priority actions in Renstra Medium term (2015-2019) Restructure government institutions to better support multimodal transport Develop national road freight strategy Progressively introduce road pricing scheme Trial new approaches to expressway delivery Revise procedures for prioritising road capacity improvements Restructure PKAI on business lines Provide customs clearance at all dry ports Integrate transport considerations into industrial estate planning Longer termIntroduce vehicle booking systems at T Priok and T Perak

13. 13 Reform Themes and Supporting Actions THEMEACTION ITEM Improving land transport access to ports 1: Construct Tanjung Priok rail link 2: Complete Tanjung Priok access road 3: Activate Tanjung Perak rail connection 4: Accelerate proposed expressway links to Tanjung Perak 5: Ensure high quality access road to Kalibaru 6: Incorporate planning for rail links in new terminal developments Delivering increased port capacity 7: Set and monitor Key Performance Indicators (KPIs) for cargo handling performance at key ports 8: Promptly deliver increased container port capacity 9: Improve facilities for handling motor vehicles at Tanjung Priok 10: Introduce a vehicle booking system at the main container terminals Developing freight rail infrastructure and terminals 11: Complete double tracking Jakarta–Surabaya 12: Develop selected freight only rail links 13: Selectively improve rail track strength 14: Promote use of the full potential of existing intermodal terminals 15: Construct a common user rail terminal at Cilegon 16: Develop a network of new intermodal terminals Strengthening the freight capability of road network 17: Develop a national road freight strategy 18: Adopt new road design standards for all roads in strategic freight network 19: Trial new approaches to expressway delivery 20: Change the way in which road capacity projects are prioritised Fostering a more competitive environment 21: Remove fuel subsidy on diesel fuel 22: Progressively introduce a road pricing regime 23: Define and implement track access charges 24: Adopt point-of-origin approach to enforcement of weight limits 25: Foster competition in the provision of container terminal services 26: Modernise PT Kereta Api Indonesia (PTKAI) freight operations Introducing new service models 27: Promote Cikarang–Surabaya rail services 28: Expand Ro-Ro shipping services between Java and Sumatera 29: Develop specialised rail services for automobiles Improving planning and trade facilitation 30: Formally establish peak logistics industry consultative body 31: Restructure government institutions to support multimodal approach 32: Integrate transport considerations into planning of industrial estates 33: Intensify congestion reduction efforts in major urban centres 34: Further streamline cargo clearance procedures 35: Provide customs clearance at inland terminals

14. 14 Indicative Timing for Recommended Actions.. 1/2 Short Term (before 2014) Medium Term (2015– 2019) Long Term (2020 and beyond) In Progress Action 2: Complete Tanjung Priok access road Action 4: Accelerate proposed expressway links to Tanjung Perak Action 9: Improve facilities for handling motor vehicles at Tanjung Priok Action 11: Complete double tracking Jakarta–Surabaya Committed Action 1: Construct Tanjung Priok rail link Action 5: Ensure high quality access road to Kalibaru Action 8: Promptly deliver increased container port capacity Action 18: Adopt new road design standards for all roads in strategic freight network Action 23: Define and implement track access charges Action 25: Foster competition in the provision of container terminal services Action 33: Intensify congestion reduction efforts in major urban centres Planned Action 3: Activate Tanjung Perak rail connection Action 6: Incorporate planning for rail links in new terminal developments Action 34: Further streamline cargo clearance procedures Previously recommended Action 26: Modernise PT KAI freight operations Action 13: Selectively improve rail track strength Action 14: Promote use of the full potential of existing intermodal terminals Action 15: Construct a common user rail terminal at Cilegon Investigation and preparation Implementation

15. 15 Indicative Timing for Recommended Actions.. 2/2 Short Term (before 2014) Medium Term (2015– 2019) Long Term (2020 and beyond) Action 16: Develop a network of new intermodal terminals Action 17: Develop a national road freight strategy Action 19: Trial new approaches to expressway delivery Action 20: Change the way in which road capacity projects are prioritised Action 21: Remove fuel subsidy on diesel fuel Action 22: Progressively introduce a road pricing regime Action 28: Expand Ro-Ro shipping services between Java and Sumatera Action 31: Restructure government institutions to support multimodal approach Action 32: Integrate transport considerations into planning of industrial estates Action 35: Provide customs clearance at inland terminals New initiatives Action 7: Set and monitor KPIs for cargo handling performance at key ports Action 10: Introduce a vehicle booking system at the main container terminals Action 12: Develop selected freight only rail links Action 24: Adopt point-of-origin approach to enforcement of weight limits Action 27: Promote Cikarang–Surabaya rail services Action 29: Develop specialised rail services for automobiles Action 30: Formally establish peak logistics industry consultative body Investigation and preparation Implementation

16. 16 Options for Next Step

17. 17 Terima Kasih