Policy Review: Indonesia Begs Loans from World Bank to Fund LRT Projects

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JAKARTA (TheInsiderStories – The World Bank is reportedly offering the Indonesian government a loan to fund the country’s light rail transit (LRT) developments, said transportation ministry on July 11. According to the minister Budi Karya Sumadi, the loan offers for four major cities namely Medan, Bandung, Surabaya, and Bali.


Sumadi added, that the projects will likely utilize a Government and Business Entity Cooperation scheme upon handling the multiple LRT projects. Currently several companies has lack of liquidity to build the some LRT projects across the nation.

The first LRT in the country build in the Capital City of Jakarta and the South Sumatra Provincial Capital of Palembang to support the 18th Asian Games event in August of this year and as a trigger for the development of the same transportation system in other cities in Indonesia.

Traffic gridlocks are a big problem in big cities like those in Jakarta and other big cities in the country. The present of LRT system is therefore expected to offer alternative transportation system which is effective and efficient for urban people.

The existence of LRT is also expected to become a solution to the problem of traffic congestion in urban areas, as well as to increase the mobility and the income of the people. According to Sumadi, LRT is feasible to be built in a city with a population of at least two million people.

The LRT development in Palembang has reached 78 percent with a total length of 23.4 kilometers across 13 stations. The Palembang LRT project is expected to be finished before the 18th Asian Games kicks off.

In the meantime, there are two LRT lines being developed in Jakarta, namely the Jakarta and its satellite towns of Bogor, Depok, Tengareang and Bekasi LRT and the Jakarta LRT. This projects now has a liquidity problem and doubtfully ready to operate ahead of the Asian Games.

Indonesia has paid a greater attention to speed up its infrastructure development, including toll roads, ports and railways, affordable housing and power plants. Constrained by limited funds, the country has been facing difficulties in realizing its grand ambitious for its massive infrastructure building.

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