Indonesia Plans to Establish Transportation Agency
The Indonesian Chamber of Commerce and Industry held a meeting with theme: "Accelerating the Use of Transportation Infrastructure with the Public Private Partnership (PPP) Scheme in Jakarta, on Wednesday (03/20). Photo by Theinsiderstories.

JAKARTA (TheInsiderStories) – Indonesian government plans to establish an agency to integrate the transportation mode in Jakarta and surrounding areas. The new planned is expected to solve the traffic problem in Jakarta, Bogor, Depok, Bekasi an Tangerang.

Governor of Jakarta Anies Baswedan revealed, the establishment of a special agency is under the auspices of the regional government or regional-owned Enterprises so that the project development is more effective not limited to the capital.

The new agency will oversee the public transportation mode management companies in Jakarta, such as PT Transjakarta, PT MRT Jakarta, PT Kereta Commuter Indonesia, and PT LRT Jakarta.

According to Baswedan, recently the integrated transportation development project is very complicated, which includes the construction of Mass Rapid Transit (MRT), Light Rapid Transit (LRT) and clean water. As known, the investment value of this transportation mode development reached Rp571 trillion (US$40.49 billion) in 10 years.

“The President has directed that the development in this area be left entirely to the Jakarta government. Therefore, we will soon form a body specifically managing this project,” he said.

The plan received support from the Chamber of Commerce and Industry. According to Deputy Chairperson of Construction and Infrastructure Sector of the association Erwin Aksa, the establishment of the new entity has the potential to reduce the complexity of the licensing and management process, and is effective in consolidating the work of various directorates general under the Ministry of Transportation.

“There are so many projects, there are trains, sea tolls, land tolls etc. Therefore need a managing body to manage all directorates under the Ministry of Transportation,” he said yesterday (03/21).

Aksa hoped the agency was formed to assist the government in analyzing, planning and evaluating development properly, so that development projects could work more effectively.

“This team will calculate all budget shortfalls that must be subsidized by the government, prepare documents, and so on. We see, all the directorates in the ministry have been running on their own so far, ” said the President Director Bosowa Corporation.

In addition to the public private partnerships (PPP) implementation mechanism, Aksa noted, it also needs to know more about the benefits received by private developers, especially for those who want to participate, including recognizing challenges and obstacles in implementing the scheme.

As known, the government has issued a regulation through Presidential Regulation Number 55 Year 2018 concerning the Master Plan for Transportation of the Greater Jakarta area. However, after being issued, the regulation has not given a “green light” to business entities involved in  projects to help speed up and simplify the implementation process.

Based on Indonesian Commerce and Industry points, there are at least a number of projects that are constrained in implementing the activities, especially in the Ministry of Transportation, such as Transit Oriented Development Poris Plawad in Tangerang, Banten which reached the auction stage and Final Business Case and Jatijajar in Depok, West Java. The Business Case Outline process experienced obstacles in its implementation.

“If there are obstacles, the constraints certainly must be traced where, even though the business entity has shown good faith to assist in the development of this project,” said Aksa.

He assessed that the number of players in the this project, which consists of the central government and local governments as regulators, the Person in Charge of the Cooperation Project as technical policy makers and business entities as capital owners and implementers of PPP activities is an internal obstacle that needs to be resolved as soon as possible.

“Many parties involved in this project are a challenge especially for investors who want to invest their capital, but must go through a complicated process,” he added.

Written by Daniel Deha, Email: