The Current Transport Policy Environment (Law 23/2007: Objectives & Follow-up)Harun al-Rasyid LUBIS

15 December 2009

1. Legal and Regulatory ReformA. Past & Recent Law # 23/2007B. Railway Policy Reforms & Objectives

2. Moving ForwardA. Goals of Rail Sector DevelopmentB. Roles & Strategic Directions

3. Follow-upA. Infrastructure Ownerships and Rolling StocksB. Option of Railway Organization ModelC. Railway Restructuring VariablesD. Possible Institutional & Regulatory DevelopmentE. National RMP and Indonesia Railway Forum

Railway: Legal & Regulatory Reform

PASTLaw # 13/1992 GR No. 69/1998

Rail Infrastructure and Rolling Stock

GR No. 81/1998 Rail Traffic and Transport

NEWLaw # 23/2007 GR 56 /2009

Railway Operation and Management

Draft GR Rail Traffic and Transport

1. Article 214 ; Railway Audit and PT KA Betterment ( only 4 months left )

2. Opens up Local Government involvement and private sector participations

a) Institutional and implementing regulations need to be set upb) Infrastructure ownership and management need to be clearly defined , andc) Separation of regulatory function and service providers

3. If the market allow, introduce competition and network access to new TOCs

Law # 23 /2007 : Policy Reform & ObjectivesToday

Other Corporati

ons

Local Goverme

nts

Railway operations and management should be efficient and responsive to the market – competitive services

• Highly depending on public funding

• Dominantly PT KA Monopoly• Too centralistic planned and

managed

HOW ?

Future Expectation ( by Law)

The objectives of regulation are:

1. to regulate the establishment and provision of railway services in Indonesian;

2. to promote and protect the interests of users of railway services;

3. to promote competition in the provision of railway services;

4. to encourage investment in railway infrastructure and rolling stock by the private sector where appropriate; and

5. to promote efficiency and economy in the provision of railway services.

To position rail transport as the backbone in national transport system (intra-island)

To increase rail transport sharesa. 20% passenger (now 6%-7%)b. 15% freight ( now < 1% )

MOVING FORWARD --Goals of Railway Sector Development

Achievable targets of rail market share by region /corridor / islands need to be specified in NRMP

1. National Railway Masterplan (NRMP) will guide the long term development of the sector

2. Consolidated and good quality NRMP document is necessary

Rail Transport Shares Worldwide

Sumber : diolah dari berbagai sumber

COUNTRY Passenger Freight

Japan 29% 5%

EU & USA < 10% 10 – 30 %

Indonesia 6 – 7 % < 1 %

Roles of the railway sector in the

national economy

• Rail Advantages: efficient, environment friendly, less energy for a massive and long haul , less land take, etc..

• Will push other sectors development, backward and forward, such as job opportunities, property, industry, supported distribution and delivery services, etc...

• Passenger Commuter Trains and Intercity Medium Distant

Roles in Logistic & Distribution

• Rail transport is strategic part of logistic system and supply chain management (SCM)

• To be more competitive, rail services need to be improved, also as complementary for other modes (land, sea and air transport) so as to form an efficient and seamless transport

Roles and Strategic Directions

FOLLOW-UP :Objects to be managed and regulated

1. Railway infrastructure:a. Rail trackb. Stationsc. Other train operating facilities (signal,

telecommunication and electricity)

2. Rolling stock (trains):a. Locomotiveb. Cars (for passengers)c. Wagons (for freight)d. Special facilities or rolling stock (for track

maintenance-- MTT)e. Workshops, depots for R/S maintenance

Railway Organization Model

Separated : Multi-OperatorIntegrated Model (a & b)BUS

1 BUS 2 BUS n

BUP

B U P & S

D A n

BUS n

D P

(a)

(b)

(c)

Notes:BUP & S = Infrastructure and train operating company (integrated)BUP = Infrastructure management companyBUS = train operating companyD A = division of transportDP = division of InfrastructureTAC = track access charge

TAC

TAC

TAC

B U P & S

Railway Restructuring: Variables that needs to be controlled

Intermodal orIN/FOR Market

IntegratedDominant/Tenant/incrementalSeparatedPublic/Mixed/Privt Ownership

COMPETITION STRUCTURE

REGULATION

TariffsAccess RegimeEntry/LicensingSafetyGovernment Support

Organization and Ownership

True “separation’’

OR

GA

NIZ

ATIO

N S

TR

UC

TU

RE S

PEC

TR

UM OWNERSHIP SPECTRUM

PUBLIC MIXED PRIVATE

INTEGRATEDChina, India,

Indonesia

Some Arg. Frt concessions, Mex City frt, GYSEV

Brazil Concessions (Frt and pax),

Argentina pax and some frt

concessions, 3 main JRs

DOMINANT/TENANTRussia Pax, 3

island JRsAmtrak, VIA, JR

FrtUS/Canada/Mex

frts

Accounting (Division)

"EU"

SEPARATED HoldingDB, FS, PKP,

RU

German concessions and

companies

InstitutionalSJ/BV/Grn,

Railion DK & NL

Swedish concessions,

ARTCUK

Possible Stages of Institutional and Regulatory Development

14Past Now Follow-up Future

( Service providers)

Key Players on Railway

Railway Law 23/2007 categorizes at least six key parties or players in the rail sector i.e.:

a) Governments (central, province, regency),

b) Business entities or companies as service

providers of infrastructures and/or transport services)

c) Research institutes,

d) Universities,

e) Customers, and

f) Societies ( viz. industries)

National Railway Master Plan & Indonesia Railway Forum

1. Rail sector Long term investment Plan(20 years)

2. Strategy & Long term Action Plan

3. Rail Improvement Projects ( 4 to 5 years)

4. Yearly Program and Project List ( 1 to 2 years / multi years)

NRMP

MTDP

Rail Budget

1. Indonesia Railway Forum

Parliament and Ministerial Approval

Thank you…