Central Java Regional Railway - JST

Proceedings of the Eastern Asia Society for Transportation Studies, Vol.7, 2009

Development of Regional Railway System in the Central Java Region

Tomokazu WACHI General Manager Planning Department Global Consulting Headquarters Oriental Consultants Company Limited 12-1, Honmachi 3-chome, Shibuya-ku, Tokyo, 151-0071, Japan Fax: +81-3-6311-8044 E-mail: [email protected]

Hirohisa KAWAGUCHI Professional Engineer Planning Department Global Consulting Headquarters Oriental Consultants Company Limited 12-1, Honmachi 3-chome, Shibuya-ku, Tokyo, 151-0071, Japan Fax: +81-3-6311-8044 E-mail: [email protected]

Sadayuki YAGI Professional Engineer Japan Research Institute 10-2, Ichibancho, Chiyoda-ku, Tokyo, 102-0082, Japan Fax: +81-3-5275-1569 E-mail: [email protected]

Thomas L. KENNEDY Transport Economist 11 Grey Rd., Glencaim Heights, Simon’s Town, 7975, South Africa Fax: +27-21-782-5874 E-mail: [email protected]

Takayuki HAGIWARA Consulting Engineer Railway Department Global Consulting Headquarters Oriental Consultants Company Limited 12-1, Honmachi 3-chome, Shibuya-ku, Tokyo, 151-0071, Japan Fax: +81-3-6311-8043 E-mail: [email protected]

Abstract: Although the current business environment for the railway transportation in the Central Java region comprising of Central Java Province and Yogyakarta Special Province of Indonesia is not bright by any means, it is essential to revitalize the railway transport sector to support and sustain the social and economic needs and activities of the region. The new railway law allows local government and private sector participation in railway industry and taking this opportunity provided under the new law, the regional master plan was formulated. The master plan includes methods to achieve affordable transport system including the utilization of existing railway facilities and second hand rolling stocks, as well as TOD mechanism, bidding process and institutional arrangement. Moreover, through the case study on Semarang Commuter railway, this paper presented the overall picture on how regional railway system will materialize and how efficient railway operation could be achieved.

Key Words: regional railway, public - private partnership, railway institution

1. I�TRODUCTIO�

The Central Java region, comprising the Central Java Province (or Provinsi Jawa Tengah) and

Yogyakarta Special Province (or Provinsi Daerah Istimewa Yogyakarta), Republic of

Indonesia, is located in the central part of Java Island, the most densely populated island of

Indonesia. Semarang, Yogyakarta and Solo are the main cities in the Central Java region

leading regional politics and economics. Transportation networks including road and railway

are well developed along the coastlines in the east-west direction, where the foregoing cities

are located. Although the history of railway in Indonesia and East Asia commenced in the


Central Java region, the current business environment of railway transportation is not bright

by any means. Railway is usually economically feasible is not financially viable particularly in

the development of regional railways. Moreover, due to budget constraint, railway

infrastructure and rolling stocks are dilapidated and it incurred railway operation problems

such as delays of train, railway accidents and so forth. Bureaucratic regulatory and

management system make these problems further complicated. Thus, it is essential to

revitalize the railway transport sector to support the social and economic needs and activities

in the Central Java region

Prior to 2007, PT Kereta Api (PT. KA) was the only organization authorized for the operation

and administration of railway services in Indonesia. The new Railway Law 23, 2007 allows

local government and private sector participation in railway transportation business. Based on

the new law, in order to revitalize the railway transportation industry in the region, the paper

addresses the question on how regional railway system will materialize and how railway

operation can be efficiently achieved. The role of each stakeholder in regional railway services

was examined and viable institutional arrangement was proposed.

2. OVERVIEW OF RAILWAY SYSTEM I� THE REGIO�

2.1 Railway �etwork

As of 2006, a total of 4,675 km of railway lines is in service in Indonesia. Of the total some

3,370 km or about 72% of the railway service is located in Java Island. Considering the

railway lines that are not in service, the total railway lines in Indonesia is 8,067 km long of

which some 6,076 km (or about 75%) are in Java Island. The Central Java Region railway

network which comprised the Java north trunk line which traverses the east to west (Cirebon –

Tegal - Semarang - Surabaya) directions and the Java south trunk line (Bandung – Kroya –

Yogyakarta - Solo - Surabaya); the north-south lines is linked at a location between Semarang

- Solo and Cirebon - Purwokerto - Kroya; as well as the branch line located between Kroya -

Cilacap.

Figure 1 Railway network of the Central Java region

Semarang

Solo

Yogyakarta

Cilacap

Cirebon

Tegal

Kroya

Kutoarjo

Sragen

to Jakarta

to Bandung

to Surabaya

to Surabaya Sleman

Purwokerto


2.2 Railway Passenger Transport

Passenger transport in the Central Java Region is mainly through the operation of long-

distance trains which has been the core business of PT. KA. Although railway passenger

volume of OD pairs connecting large cities in Central Java region such as Semarang – Tegal,

Semarang – Blora, Solo – Yogyakarta, Solo – Sleman exceeds the 600 passengers per day

mark in both directions, Semarang – Solo pair accounts only to about 40 passengers per day in

both directions. Moreover, in Central Java local trains for business class and economy class

also operate between among major cities such as Semarang, Solo, Yogyakarta, Tegal, Kutoarjo

and Sragen.

2.3 Railway Freight Transport

The total volume expressed in ton-km of cargos transported by rail in Java Island has been

decreasing. The reduction in freight carrying capacity is due to a policy of prioritizing

passengers and poorer service due to aging rolling stocks including locomotives resulting to

the low utilization ratio of train cars. Consequently, the freight revenue ratio is on the decline.

The old train cars, coupled with insufficient maintenance, have resulted in reduced operation

speed As a result, the freight business is being taken away by trucks which are essentially

more suitable for small-lot freights and door-to-door transportation service. In addition, there

is still widespread use of 2 axle freight wagons without brakes; this makes freight train

operation very inefficient as well as dangerous.

2.4 Competition with Other Mode of Transport

Road traffic has become dominant in land transport in line with motorization. The number of

automobiles has been rapidly increasing except during the period of economic crisis. On

average, the annual rate of increase of vehicles is more than 10% in both provinces. The rapid

motorization has brought many urban problems to major cities primarily due to traffic

congestion and environmental pollution. Traffic congestion on the roads around and between

major cities such as the road connecting Semarang and Solo is getting horrendous yearly. As

more toll roads are constructed, the competitive position of the railway industry is further

weakened. On the one hand, in order to reduce road damage caused by overloaded trucks,

regulations against overloading is being enforced and control is gradually being tightened. As

regulation against overloading becomes more stringent, it will be a great opportunity for the

railway industry to draw the attention of consignees and forwarders alike to a more cost-

efficient and effective mode and means of transport.

Each metropolis are provided with intercity bus terminals from which relatively frequent bus

services connecting the city with Jakarta or major cities in the region are operated. In the

Central Java region, roughly 200 bus services the Tegal, Semarang, and Solo route daily.

While the use of motorcycles is a very popular means of transport for the common Indonesian,

for short-distance travel, buses are the major mode of moving people for longer distances

because the fare is generally reasonable due to the high competition among bus companies.

The annual average growth in number of passengers for major air routes in the Central Java

region between 2000 and 2006 is as high as 25% and appears to be on the increasing trend

Therefore, railway passenger demand for long distance train routes such as the Jakarta –

Semarang, Jakarta – Yogyakarta, and Jakarta – Solo is facing severe competition from lower

airfares brought about by the deregulation of the airline industry. The annual cargo volume

handled at the three major airports in Central Java Region has also remarkably been growing

since 2000.


2.5 Review of Current Railway Administration

2.5.1 Overview

Prior to 2007, PT. KA was the only organization authorized for the operation and

administration of railway services in Indonesia. PT. Kereta Api is a wholly state-owned

company (Persero) with shares owned by the Ministry of State Owned Enterprises. PT. KA

owns its own rolling stock and locomotives though it generates insufficient funds to meet

renewal needs. The railway network of the country is operated and controlled by PT. KA,

maintaining infrastructure under ministerial supervision, with ownership remaining with

Ministry of Transport (Dephub). Dephub is responsible for the management of rail

infrastructure. In theory, Dephub is responsible for the ownership, maintenance and

investments in the railway network (maintenance is performed by PT. KA, on behalf of

Dephub). Of the 25 or 30 railways around the world that have separated rail infrastructure

from operations, Indonesia is the only country that allocated responsibility of rail

infrastructure to a government ministry.

2.5.2 IMO, TAC and PSO

As with many predominately passenger railways in the world, PT. KA cannot recover full

costs from revenue. During 1999, a financial model was developed for PT. KA consisting of

three financial flows: (i) reimbursement by Government to PT. KA for maintenance of

infrastructure (IMO); (ii) track access charges owed by PT. KA to government for the use of

the infrastructure (TAC); and (iii) financial compensation to PT. KA, essentially to cover the

cost of operating economy passenger trains (PSO). Essentially this means that the amounts

received by PT. KA are the PSO and IMO; PT. KA owes to the Government the TAC.

In theory, this system should have provided full compensation to PT. KA for operating

economy passenger trains and each of the three items was to be independently calculated;

however, each year, the actual amounts allocated to PT. KA are lower than the requested

amounts and the shortfall in payments has been significant. In fact, since 2006, the amounts of

TAC and IMO have been set to be equal to each other; the net amount paid to PT. KA is

essentially the PSO. This system is not working as intended; amounts for each category are

not calculated independently; actual amounts paid are dependent on allocations from the

budget. There are limited performance or efficiency incentives incorporated in the process.

2.5.3 New Railway Law No. 23, 2007

Generally, the new railway law provides legislation that ends the monopoly of PT. KA for the

railway business in Indonesia. Railway Law number 23 enacted in 2007, provides for the

operation of trains and construction, maintenance and management of infrastructure by

entities other than PT. KA; these could be legal entities established for this purpose or

Provincial or City governments.

Consistency of the integration of the country’s railway network is to be done by means of the

development of railway master plans, at the national, regional, province and regency/city

level. These plans should include volumes of cargo and passengers; current and anticipated

including needed infrastructure and facilities to support these future forecasts. These master

plans should also be consistent with land use planning at the provincial and city level.

However, the legislation does not specify which services would be candidates for

private/government partnership operation. Candidate projects should be evaluated and

included in a “short list” of potential projects, to be subjected to further detailed evaluation.


Though discussion on detailed regulation of the new railway law is on the table, neither

railway infrastructure manager to manage the train path allocation and to collect track access

charges on behalf of PT. KA nor a rail regulator to ensure fairness in the manner the

infrastructure manager conducts business as well as to adjudicate disputes between operators

and the railway infrastructure manager is clarified in the new law.

3. PROBLEMS OF PRESE�T RAILWAY SYSTEM

Present railway problems on facility, operation and regulation are summarized in the table

hereunder.

Table 1 Present railway facility problems Problems

Track * Insufficiently and inadequately maintained tracks

* Old or disordered tracks

Signal & Telecom.

* Unusable signaling facilities due to inadequate and insufficient maintenance

* Difficulties in procuring spare parts overseas

* Inefficient operation due to manual-based signaling system

CTC * Absence of CTC system in Tegal – Jerakah

* Differing CTC system between two Semarang Stations

Level Crossing * Unsecuritized illegal crossings

* Dangerous crossings due to lack of surveillance

Bridge * Constraints in travel speed when passing through old bridges

Station * Waterlogging at Semarang Stations

Rolling Stock

* Slow cruising speed (particularly for long distance and freight trains)

* Frequent disorder (due to dilapidated cars) and low operating rate

* Insufficient rolling stocks to provide desirable operation

* Ground pollution and contamination due to fuel and oil lubrication leakages

Maintenance Facilities

and Activities

* Dilapidated maintenance equipment

* Dilapidated tracks in the maintenance yards

* Insufficient maintenance works (preventive/corrective maintenance as policy)

Structures * Illegal structures invading structure gauge

Integration with ports * Abandoned spur lines leading to the ports

Table 2 Present railway operational problems Problems

Line capacity * Insufficient line capacity

Safety * Frequent railway accidents (collisions, derailment, etc.)

Time Punctuality * Frequent delays of departure and arrival

Travel Time of Freight Train * Long travel time

Integration with Port, Dry port * Lack of railway facility in Tg. Emas port and dry port

Business Promotion * Passive approach strategy

* Few marketing resources

Comfort * Unsanitary conditions of the cars/rolling stocks

* Temperature, lack of air circulation and air conditioners

* Noise caused by shaking and rolling

* Inadequate lighting facilities

* Large uneven space between the train and platform

* Encroachment of illegal vendors

Security * Accidents due to illegal crossing and dilapidated structures

* Shattered windows

Frequency * Low frequency

Timetable * Low service level for local trains, intermediate stations and transfer passengers

Ticket Sales * Few ticketing outlets

* Inconvenient telephone booking system

Information Service * Station-based information service

Integration with other modes * No integration with intercity bus services


Table 3 Present railway regulatory problems Problems

Responsibility of

Railway Infrastructure

* Responsibility of infrastructure is allocated to Dephub rather than specialist executive (I

suggest we use the word “executing” agencies) agencies or companies, such as an infrastructure

manager.

Lack of Financial

Assistance

* While the PSO (Public Service Obligation) is on hand to cater for the operation of non-

profitable passenger services by the central government, due to lack of financial resources the

government is unable to fully compensate PT. KA for losses incurred in operating the services.

Detailed Regulations

on Railway

Management

* The detailed regulation on railway management is under discussion, and for this reason, the

allocation of a railway infrastructure manager and a rail regulator is still remains to be resolved.

An agreement, however, has to be reached on the level of track access charges to be paid by the

private operator as well as the priority of train movements for PT. KA trains and trains operated

by the private sector.

4. OBJECTIVES FOR REGIO�AL RAILWAY SYSTEM DEVELOPME�T

The analyses of the present transportation problems and the planning issues in the Central

Java region have resulted in the identification of four major policies.

4.1 Efficiency in Transportation System

For improvements of the energy efficiency of total transportation system in the Central Java

region, it is effective to promote railway transportation and facilitate modal shift from

passenger cars and various types of buses to trains. In Semarang, Solo and Yogyakarta

metropolitan areas, development of efficient transport system is essential to support and

sustain its socioeconomic activities. Railway transit system has an advantage over private

modes of transport in terms of travel costs and less space requirements in urban areas. Traffic

congestion in the metropolitan areas has relatively not been severe but the situation will get

more acute as urbanization progress. Railway transportation should play a primary role in the

public transportation network. Integration with other mode of public transportation system as

well as urban development should be taken into account for developing the railway system.

4.2 Equity in Transport to All Members in the Society

4.2.1 Low Income Households

A minimum level of transportation service should be provided to all inhabitants. In the Central

Java region, the mobility of low-income group is limited due to insufficient income. Railway

transport has been playing a role for providing transportation service for the poor. The tariff

for economy class passenger trains is determined by the Central government and the current

railway operator PT. KA receives a subsidy as PSO to compensate for the operation loss of

economy class trains. The service level of economy class train, however, is poor with

dilapidated and badly maintained train cars. This lessens the attractiveness of railway service

and resulting to the dwindling use of passenger railways. The standard of services should be

clearly defined and the gap between fare revenues and reasonable cost to fulfill satisfactory

services in accordance with a set of standard should be disbursed to the railway operator from

the government.

4.2.2 Disabled Persons

Presently, the availability of railway facilities for the disabled person is still very limited in the

region. Boarding of trains is sometimes difficult and hazardous due to the uneven and


relatively wide gap between the floor levels of trains and ground elevations even for able-

bodied individuals. As such, the provisions of satisfactory mode of transportation for all

residents are essential particularly for the disabled.

4.3 Environmental Betterment: Global Warming

Global warming is a worldwide pressing issue and almost all countries have been exerting

utmost efforts to reduce emissions of greenhouse gases. In the transportation sector, passenger

cars, buses and trucks are producing the biggest volume of greenhouse gases emissions. As

one counter-measures against this nagging problem, diversion of passenger cars, buses and

trucks to a more environmental-friendly mode of transport particularly the railway is

promoted.

4.4 Transportation Safety

Based on railway accident incidences analysis from January 2004 to May 2006, 22% of the

accidents are caused by infrastructure failures and 19% by dilapidated rolling stocks. Since

railway accidents are caused by a variety of factors, diversified countermeasures should be

considered to reduce them. The majority of the existing rolling stock of PT. KA is not in good

condition. They are old and maintenance is difficult, expensive and insufficient. Due to

limited revenue, PT. KA cannot afford to acquire new rolling stocks, and the needed tools and

equipment for maintenance. The railway safety issue, however, should not merely focus on

rolling stocks, but also on infrastructure development and enhancement. However, despite the

efforts in improving the railway infrastructure by the central government, the railway facilities

still need to be upgraded and rehabilitated.

5. REGIO�AL RAILWAY MASTER PLA�

5.1 Long Term Regional Railway System Development Plan

Commuter Trains: As support to maintain efficient urban functions in major cities of Central

Java Region, commuter trains should be promoted for existing and/or new railway lines. The

commuter rail service should avoid level crossings in urbanized areas, as traffic volume at in

street crossings is large and frequent train operation will lead to traffic congestion and

accidents. Track elevation for commuter rail in Semarang City is accorded with high priority.

The following lines have been proposed for Semarang metropolitan area: a) Semarang –

Kendal Commuter Line, b) Semarang – Demak Commuter Line, and c) Semarang –

Brumbung Commuter Line. The following lines have also been proposed for Solo: a) Solo –

Klaten Commuter Line and b) Solo – Sragen Commuter Line, while in Yogyakarta a) Yogya –

Klaten Commuter Line and b) Yogya – Wates Commuter. Line. Existing railway facilities are

being utilized for almost all these lines and second hand electric railcars from Japan are being

used to make it affordable for the region.

Urban Railways: In city areas three railway systems are proposed: Semarang Monorail, Solo

Tramway and Bantul Tramway.

Airport Links: Two railway links are proposed to facilitate access to the airports in the region.

These are Semarang airport link, a 4 km branch line to the proposed location of a new air

terminal. Solo airport link connects the existing railroad and the airport terminal and allow

“direct-through” operation to Solo and Yogyakarta.


Intercity Trains: Redevelopment of the intercity train on the Semarang – Magelang -

Yogyakarta corridor basically traces the old alignment between Semarang and Yogyakarta. The

corridor consists of: a) Yogyakarta – Magelang Line, b) Magelang - Ambarawa Line, c)

Ambarawa – Kedungjati Line, d) Semarang – Tegal Line, e) Semarang – Cepu Line and f)

Demak – Rembang Line. Improvement of the Semarang –Solo existing line has also been

proposed and this line will also be used for freight transport.

Freight Trains: The project aims to improve the reliability and efficiency of freight service by

track rehabilitation and improvement of overall traffic control system over the whole

alignment stretch, including: a) Semarang – Solo Freight Corridor (109 km) and b) Solo –

Wonogiri Freight Corridor. In addition, four access to major freight facilities are proposed.

These include: a) Semarang Port Access, b) Kendal SEZ Access, c) Kalijambe dry port Access

and d) Yogyakarta Dry Port Access.

Tourist Train: Railway lines for the tourism industry in the region are proposed. This involves

the improvement of the railway system and railway museum in Ambarawa to attract more

railway amateurs. The development of a branch line to Borobudur from the proposed intercity

railway corridor between Yogyakarta and Magelang is also being proposed to provide better

access to world heritage sites.

Railway-Related Development Projects: Integrated development of railway system and

urban/housing development along the commuter railway line is recommended to strengthen

the financial viability of the railway system development by: a) localizing development

benefits from increase in land value in housing development due to improvement of railway

services and b) increasing fare box revenue brought about by increase in demand of railway

passenger due to housing development along the railway line.

Figure 2 Proposed projects for regional railway development plan

5.2 Preliminary Evaluation of the Projects

Sequence of the proposed railway projects have been examined from technical point of view.

Some projects have to be started after the completion of other projects and some projects

partially share railway tracks or stations. This sequence of the projects has been taken into


consideration when giving priority to the projects. Considering these relationships and also

features of these projects, they are consolidated into 20 packages.

The benefits of railway system development projects estimated in this preliminary evaluation

include Vehicle Operating Cost (VOC) saving, Travel Time Cost Saving, Reduction of Traffic

Accidents, Reduction of CO2 and reduction of road damage. VOC and travel time cost

savings from both railway passengers and drivers of parallel road are included. The

preliminary economic evaluations were conducted but implementation of several projects

appears difficult to justify from economic point of view under current conditions.

Table 4 Project phasing of Central Java region [million USD in 2008 Price]

Project Packages Route (km) Project (km) Capital Cost Cost per km

Short Term Projects

Semarang Commuter 43 34 106.2 3.1

Yogya Commuter 58 58 129.5 2.2

Sub Total 101 92 235.7 2.6

Medium Term Projects

Solo Commuter 58 58 143.9 2.5

Semarang Airport Link 9 4 32.7 8.2

Semarang – Solo – Yogya Freight Corridor 115 101 121.6 1.2

Kendal SEZ Access 5 5 20.9 4.2

Semarang - Tegal Intercity 150 150 45.0 0.3

Semarang - Cepu Intercity 140 140 36.0 0.3

Sub Total 477 458 400.1 0.9

Long Term Projects

Semarang Monorail 12 12 362.0 30.2

Solo Tramway 6 6 51.9 8.6

Bantul Tramway 15 15 111.1 7.4

Solo Airport Link 7 8 69.3 8.7

Wonogiri – Solo Freight Corridor 36 36 25.8 0.7

Yogya – Magelang Intercity 47 47 177.7 3.8

Borobudur Access 7 7 11.7 1.7

Magelang – Ambarawa Intercity 37 37 125.4 3.4

Ambarawa – Kedungjati Intercity 37 37 76.3 2.1

Semarang – Demak – Rembang Intercity 110 107 360.3 3.4

Sub Total 314 312 1190.4 3.8

Grand Total 892 862 1826.1 2.1

Preliminary environmental impact evaluation shows negative effects to social environment

that are expected from the development of commuter and intercity train operation. The

assessment is based on air quality, noise, vibration, water quality surveys and right of way

(ROW) and public hearings with affected and concerned individuals and groups. Additionally,

certain crucial socio-economic concerns brought about by the development of the commuter

train, intercity train, urban railway and airport link projects maybe encountered. However,

these negative impacts will be countered by reduced pollution/noise from busses and trucks

reduced from the road network.

5.3 Institutional Setup for Regional Railway Company

5.3.1 Regulatory Body

It is recommended that an infrastructure manager be appointed to manage the train path

allocation and to collect track access charges on behalf of PT. KA in medium-term. PT. KA

could remain as the organization performing maintenance, but the administration of the train

operation slots would be the infrastructure manager. In many European countries, the


government owns the infrastructure, performs maintenance and manages the infrastructure

(dispatching/allocating train paths), through separate government agencies. In Indonesia, it

might be easiest to keep PT. KA under their existing organization structure, rather than create

a new government entity. However, as PT. KA maintains the infrastructure and is a train

operator, they would possibly be biased when establishing train paths and administering track

access charges. As the regional railway will operate in a small part of the national railway

system, it is probably not prudent to create the infrastructure manager at this time. There will,

however, need to be created within Dephub an oversight unit to ensure train paths and track

access charges are administered on a non-discriminatory basis between PT. KA trains and

trains of other companies.

In addition to the infrastructure manager, a Rail Regulator should eventually be created to

ensure fairness in the manner the infrastructure manager conducts business as well as to

adjudicate and disputes between operators and the railway infrastructure manager. The level of

track access charges would be calculated by the Rail Regulator, administered by the

infrastructure manager and paid by rail operators. The Rail Regulator essentially looks after

the interests of the rail users, promoting use and development of the rail network, efficiency

and economy in railway services and promoting competition in the rail sector.

However, in the initial stages of provincial/private railways in Indonesia, it is probably not

necessary to create the rail regulator; in fact, in many European countries, the regulator is not

an active participant; only in the case of disputes between operators and the infrastructure

manager, does the regulator intervene. This is medium term recommendations, there will,

however, have to be an agreement (possibly mediated by the provincial or central government)

regarding the level of track access charges paid by the private operator as well as the priority

of train movements between PT. KA trains and private trains in the short term.

5.3.2 Privatization of Railway Transportation Industry

Six different techniques/models for improving the efficiency of railway operations, ranging

from minimal private sector involvement (improving the operating efficiency of freight trains

by PT. KA) to total control over railway operations and maintenance (railway concessions),

are listed by increasing intensity of private sector involvement:

• Operation of more efficient freight trains

• Separation (“outsourcing”) of non-core activities from the national railway

• Private companies contracting trains operated by the national railway

• Private trains operating on infrastructure of the national railway (“Open Access”)

• Private sector operation of light density railway lines

• Railway operating concession

5.3.3 Establishment of Regional Railway Company

A Central Java Railway (CJR), which is responsible for railway operations over regional lines

on the corridor of Semarang – Solo – Yogyakarta, is proposed. The primary functions to be

undertaken by CJR would be train operation (with train and engine crews as CJR employees)

while infrastructure maintenance and train control would remain with PT. KA.

Management of CJR will be a joint public – private partnership (PPP). The railway manager

would likely be a partnership between an Indonesian freight forwarder and an overseas

railway operator for freight railways. In the case of commuter railways, a private sector


partner will include a property developer. The presence of government representatives will be

reflected primarily in the definition of the passenger train service CJR must provide; the

railway will be essentially managed and operated by the private sector railway manager. PT.

KA is shown as an optional participant in the organization.

Financing of needed capital improvements in the track and signaling systems would be from a

combination of central and provincial government sources. Funding for rolling stock and

some minor infrastructure improvements would be from the railway operator (CJR). CJR

would reimburse PT. KA for track maintenance and train dispatching through payment of a

track access charge (maintenance and train control fee) and for the capital improvements to

the infrastructure paid by the provincial government, a track access charge would be paid.

PSO from central government and a possible additional amount from the provincial

government will cover any remaining shortfall.

Figure 3 Regional railway organization option

Several alternatives for regional railway organization were proposed, and Figure 3 shows an

example of them. Establish a Local Government Owned Enterprise (LOE) to develop and

administer a performance based contract for the rail operator. The performance based contract

would include the payment of a management fee to the operator, provided certain operational

service standards are achieved. The railway operator would be granted a concession to operate

the line for a period of twenty years, for example. Performance of the operator would be

reviewed every five years, and if found to be suitable, the concession would be continued for

another five years. During the start – up phase of the project a Project Implementation Unit

(PIU) within the provincial government would be established to develop and monitor the

bidding and selection process of potential candidate companies to become the rail operator.

After the rail operator is selected and begins operation, the PIU will fall away and be replace

by a LOE to administer the performance based contract. This LOE would be staffed by

individuals familiar with railway operations, finance and management; possibly some of the

same individuals as in the PIU. The rail operator would be an Indonesian legal entity, most

likely a partnership of an Indonesian freight forwarder, a real estate developer and an overseas

railway operator and would be selected through a competitive bidding process. The real estate

developer would be essential if the CJR were to operate commuter services as the concept

would be to develop high – density housing along the railway line in order to make the

commuter services more attractive to potential users.

6. CASE STUDY: SEMARA�G COMMUTER RAILWAY

6.1 Passenger Demand

Provincial Government /

Project Implementation Unit

Railway Monitoring Body

Local Government

Indonesian Legal Entity

Rail Operator

Railway Operator

Freight Forwarder

Property Developer

Ministry of Transport

(Directorate General of Railways)

PT. Kereta Api

TAC

Performance Contract

TAC (Historical Investments Maintenance and Train Control)

PSO Subsidy

TAC (Provincial Investments)

PSO Top-up Monitor Performance Contract Management Fee to Rail Operator


For demand forecast, the commuter railway ridership is subject to the growth of GRDP per

capita for each metropolitan area. The total daily boarding passengers for each commuter

railway line in 2020 and 2030 are presented in Table 5. Moreover, line loading, or railway

passenger volume between stations, in a peak hour is one of the important planning

parameters for train operation planning of the proposed new commuter railways. The table

also shows the maximum hourly passenger loading that is estimated based on morning peak

ratio of commuting trips to the city as derived from the SP survey results (JICA and Dishub,

2009). While the assessment depends on each commuter rail line with different OD patterns,

total daily passenger volume is about 10% to 15%.

Table 5 Commuter railway demand forecast in years 2020 and 2030 Year 2020 Year 2030

Railway Line Daily Volume

(pax/day)

Peak Line Loading

(pax/hour/direction)

Daily Volume

(pax/day)

Peak Line Loading

(pax/hour/direction)

Semarang-Kendal Commuter 42,000 5,700 64,000 8,600

Semarang-Demak Commuter 24,000 3,800 37,000 5,700

Semarang-Brumbung Commuter 37,000 5,800 56,000 8,800

Note: Under the assumed fare of Rp. 5,000.

6.2 Profile of Service and System Improvement

The commuter train projects aim to provide the following service levels as basic requirements.

• Serving commuting passengers of satellite cities within 30 km from each regional core.

• Frequent operation with double track for all commuter lines

• From 10 to 20 minutes headway at peak hours, and 30 to 60 minutes headway at off peak

hours depending on the traffic forecast

• Express and local train services at average speed of 50 and 35 km/h respectively

• Safe and reliable operations with automated signaling, train control and telecommunication

systems

• Environmental friendly and energy efficient service with electricity-based traction system

• Increased number of stations with approximately 3km intervals between each stops

• User-friendly station facilities, such as high platform, commercial establishments, and

barrier free considerations (elevators, toilets, signage, tactile tiles, slopes etc)

• Comfortable railcar interiors (Second hand electric railcars procured from international

market, i.e. Japan)

• Improved accessibilities to stations (Station plaza, feeder services etc)

Figure 4 Semarang commuter railway

Semarang

Demak

Brumbung


Based on the foregoing objectives and requirements of the commuter train services, route

alignments for the same were identified as discussed below. Semarang Commuters consist of

3 commuter lines, namely: Kendal, Demak and Brumbung Commuters.

6.3 Integration with Housing Development along the Corridor

Integrated housing development with the following features is proposed along the commuter

railway lines.

• 9 housing development areas are proposed. Each area is approximately 70 to 100ha with

2,000 to 3,000 inhabitants.

• Railway station will be designed to international standards. Barrier free concept as

appropriate will be included the plan.

• Station plazas will be provided with a terminal for public transportation facilities including

feeder services, pedestrian walkway and commercial areas such as shopping malls and

banks.

• Access roads are to be improved to link the railway station and residential areas as well as

railway stations and arterial roads.

• Housing development will be comprehensively integrated to include the development of

basic infrastructure such as electricity, water supply, sewage, and telecommunication, and

inducement of social facilities for education, medical care, religious establishments and

police offices.

• A suburban shopping mall which is connected directly with the new railway station is

proposed. This development will offer the use of the railway for commuting on weekdays

as well as weekends on shopping.

Proposed scale of housing development will be based on the middle income category with

low-rise buildings and detached houses. Taking account of food security, conversion of

agricultural land to resettlement will be avoided to the extent practicable, and one measure is

the development of smaller areas for high-density inhabitants. Thus, the inclusion of middle to

high-rise buildings into the plan will enable the accommodation of considerable inhabitants in

a limited space. This plan will be coordinated with relevant local government agencies and

organizations.

6.4 Urban Development for City Centre

Urban redevelopment could enhance creating business agglomeration through the

constructions of office buildings and associated infrastructures. A well-developed business

environment would attract business establishments. The building of a new railway station, by

exploiting the existing rail track, would provide access to railway services including the

commuter railways and airport link. Taking account of the tourism industry and the riding

public, the development of hotels and lodging facilities will also be included to plans to cater

for these services. Urban redevelopment however, needs to benefit the locality. The plan will

include the development of theatres, large shopping centers including multiplex cinemas and

recreation facilities including parks and swimming pool. These facilities are expected to

induce passengers from using the commuter rails on weekends.

6.5 Institutional Setup of Railway Operation - Commuter Railway

Three commuter rail systems for Semarang Commuter were identified and the table hereunder

shows the proposed organizations for each of the systems. PT. KA is shown as an optional

participant in the organization but will, of course, be involved as and when required to


coordinate operational matters regarding interchanging of trains between commuter railways

and that of PT. KA.

Table 6 Proposed organizations for commuter systems Government Private Sector

Central Java Province

Semarang City Government

PT. KA (Optional)

Railway manager

Property Developer

It is proposed that PT. KA will continue to provide track maintenance and train dispatching

functions services to be operated by the Railway Manager, who will hire his own locomotive

and train crew staffs, purchasing of rolling stocks and handing all ticketing services among

other works.

6.6 Financial Arrangement of Commuter Railway Operation

Financial analysis for Semarang commuter railway project was conducted based on the

assumptions described in the table hereunder.

Table 7 Basic assumptions for financial analysis Assumptions

Project

schedule

Construction starts in 2014 and operation to commence in 2015. A 30 year project life was considered

for the analysis

Economic life The assets invested will remain even after this period. The remaining value of the asset is

appropriated as the residual value for the last year of the project life. 50 years are assumed for civil

works, 40 years for station, 30 years for track works, traction power supply and maintenance

facilities, 20 years for signal, telecom & traffic control and rolling stock respectively.

Subsidy Without any regard for subsidy such as PSO

Discount rate 8% = Interest Rate 9.5%(Bank Indonesia, 07 Oct 2008) – CPI 6.5%(Bank Indonesia, Feb 2008) +

Risk Premium 5%

Track access

charge (TAC)

The operation expense is assumed to be TAC.. TAC is basically assumed to cover both initial

investment and operation and maintenance (O&M) costs. The initial investment cost is assumed at

1.5% interest rate (Japanese ODA loan) which is divided into annual cost based on the economic life

of the asset. In addition to TAC, the cost of land acquisition for the project is considered for the

financial evaluation exercise.

Capital

investment

The investment cost based on the development scenario is adjusted in proportion to the forecast

demand in the future. Additionally, the reinvestment cost is considered when the economic life of the

asset expires during the project life.

O&M cost O&M cost is assumed to increase corresponding to train operation volume based on future demand

forecast.

Fare level Economy Class: Fare(Rp.) = 59* Distance(Km) + 500

Business Class: Fare(Rp.) = 300* Distance(Km) + 2,500

Executive Class: Fare(Rp.) = 300* Distance(Km) + 2,500

Since the operation of the commuter railway service in the three metropolitan areas are

experiencing financial difficulties, Table 8 shows the suggested options to reduce investment

and operation & maintenance costs for the proposed commuter railway.

Table 8 Options for financial analysis on Semarang commuter railway Options Description

Elevated

Structure / At

Grade

Structure

Railway track is proposed to be elevated in the city center of Semarang to avoid traffic congestions at

railway crossings. The commuter railway service is expected to serve frequent operation than at

present, thus it would cause long waiting time at railway crossings if railway crossing is at-grade.

While elevated railway structure is desirable for smooth operation, the initial investment cost for the

project would increase.


Options Description

New car /

Secondhand

car

PT. KA has purchased many quality used second-hand electric cars from Japan for the operation of

Jakarta metropolitan area. As such the rolling stocks are being operated smoothly and maintenance

appears to be posing no difficulties for PT. KA. The operation of reliable and clean cars will boost the

reputation of the railway industry among the riding public. Thus, the utilization of quality second-

hand electric cars is being proposed to reduce initial investment cost.

Public Service

Obligation

(PSO)

In the financial analysis, it is assumed that the composition of economy class business class and

executive passengers is the same as at present, and will gradually shift upwards as income increases.

Urban

Development

Integrated urban development with commuter railway system is strongly recommended. The urban

development will include housing development along the corridor and urban redevelopment in the

city center. The urban development is expected to generate the increase the volume of passengers for

the commuter railway service and also at the same time to realize the benefits to be incurred from the

improvement of the railway service. In this paper, house rent income is assumed to benefit the

project. Urban redevelopment is important not only for the development of local benefits but would

also increase off-peak railway passenger demand in daytime.

Table 9 Financial benefit cost ratios on Semarang commuter railway by alternatives

B/C B/C

Cases

Train to be

Purchased

(New or

Second hand)

PSO for

Economy

Class Train

Subsidy from

Fuel Subsidy

Cut and CDM

(CO2)

Profit from

Urban

Development With Track

Elevation

Without

Track

Elevation

Case 1 Second hand Yes Yes Yes 1.148 1.221

Case 2 Second hand Yes Yes 0.876 0.925

Case 3 Second hand Yes Yes 0.850 0.929

Case 4 Second hand Yes 0.601 0.656

Case 5 Second hand 0.315 0.344

Case 6 New Cars Yes Yes Yes 0.963 1.005

The results of the financial analyses imply that the commuter railway project will not be

feasible if government financial supports are not provided. Additionally, the guidance from the

local governments for integrated urban development such as revisions in land use plan and

improvement of road network in the surrounding areas of the railway stations, are also

necessary for the implementation of the project. To realize the merits to be accrued from the

housing development along the corridor and urban development in the city center, the

involvement of experienced real estate companies are needed in the initial stages of the

development. Either involvement of the real estate company in the Central Java regional

railway company or partnership with the property business companies are essential to develop

this kind of mechanism.

6.7 Conditions to Materialize Commuter Railway

As stated earlier, it is noted that the railway passenger demand would increase not only by

railway service improvement but also by integrated railway system development coupled with

urban redevelopment in the city center and housing development along the railway corridor.

These urban developments would not merely increase railway passenger demand and

subsequent revenue from ticket sales but also would increase profits from real estate business.

This is a common practice of absorbing the development benefits as revenues from property

businesses in Japan.

Railway business in Indonesia will not able to adequately maintain and upgrade the railway

infrastructure and rolling stocks just merely with railway transport revenue since the revenues

are limited. Consequently, the fundamental requirement is to expand the revenue base for

railway system improvement.

The implementation of housing and urban development, would first of all, change the spatial


land use at the local level. For the development of the surrounding areas of the railway

stations, the local government should provide station plazas, park, riding facilities, access

roads to the stations and road network in collaboration with real estate companies. Without

central and local governments’ supports, the railway system development will not materialize

thereby detrimental to the expected merits to be derived from the proposed project.

Additionally, conditions for private sectors to participate in the railway transportation industry

should be fair and transparent otherwise they will not be attracted. For instance, the method of

calculation of subsidy should be clearly defined otherwise it will be regarded as too risky for

them to join.

7. SUMMARY

Based on the analyses of the current railway system; the status of the facilities and operational

and regulatory problems are summarized. From the identified problems, four objectives for

railway development is conceived on and these are: efficiency, equity, environmental

improvement and safety. For purposes of achieving these four objectives, a regional railway

development master plan was formulated. It is often argued that railway, a land transport mode

with the largest carrying capacity while economically feasible is not financially viable

particularly in the development of regional railways. This master plan proposed a variety of

method to achieve affordable transport system for the region including utilization of existing

railway facilities, acquisition of quality used second hand car, as well as transit oriented

development (TOD) mechanism, bidding process and institutional arrangement taking PPP

method into account pursuant to the new railway law. Through involvement of the private

sector, in partnership with government, efficiency improvements can be made to railway

operations through strong and effective railway managers. Moreover, through case study on

Semarang Commuter railway, this paper presented two notions for the above-mentioned two

questions, how regional railway system will materialize and how to operate a railway

efficiently.

ACK�OWLEDGEME�TS

The survey was conducted under “The Study on Development of Regional Railway System of

Central Java Region” by the Japan International Cooperation Agency (JICA) and Indonesian

Ministry of Transport (Dephub) with special assistance from the transportation authorities of

Central Java Provinces and Yogyakarta Special Province.

REFERE�CE

Japan International Cooperation Agency (JICA), and Indonesian Ministry of Transport

(Dephub) (2009) The Study on Development of Regional Railway System of Central

Java Region, Final Report, prepared by Oriental Consultants, Tokyo.

Documents

Central Java Regional Railway - JST