Press Logistics Costs, Railway Development in Sumatra to Sulawesi Accelerated

JAKARTA - Coordinating Minister for Infrastructure and Regional Development Agus Harimurti Yudhoyono (AHY) said the government is encouraging the acceleration of the development of the national railway network as part of a strategy to strengthen connectivity and reduce logistics costs.

The effort is focused on areas outside Java to reduce logistics costs, reduce regional inequality, and strengthen national connectivity.

This was conveyed by AHY when he chaired a coordination meeting to follow up on the development of the railway network of Sumatra, Kalimantan and Sulawesi at Tanah Abang Station, Jakarta, today.

In his instructions, AHY emphasized that the development of cross-island train networks was a direct mandate from President Prabowo Subianto as part of the National Priority Work Program (PKPN), especially in the infrastructure and connectivity sectors.

"This is the big vision of the President. We want to ensure that Sumatra, Kalimantan and Sulawesi are not too far behind. By building an integrated railway network, we can significantly reduce logistics costs and increase economic competitiveness between regions," said AHY in a written statement, Wednesday, April 22.

The General Chair of the Democratic Party said that until now there is still a fairly large inequality in the development of rail-based transportation in Indonesia. For this reason, a planned and collaborative strategic step across ministries, institutions and local governments is needed.

"We have to be honest about today's conditions. Our railway network is still very limited compared to other countries. This is not to be pessimistic, but rather to trigger us to work harder and more focused," he said.

AHY also highlighted the low contribution of railways to national mobility, namely around 4 percent for passenger transportation and 1 percent for logistics.

"In fact, trains have very great advantages, including in terms of efficiency and emissions. In fact, its contribution to greenhouse gas emissions is very low, less than 1 percent. This must be encouraged as part of the commitment to net zero emissions," he said.

In addition, he also highlighted the investment gap between road and railway development, which has been quite wide.

"We are not saying that road construction is not important, of course we still have to do it. But, we also see a significant gap in railway investment. This is what we have to correct together," said AHY.

In the context of regional development, AHY explained, each island has different challenges and potential. Sumatra needs to strengthen existing networks and expand new routes, Kalimantan needs to be developed from scratch, while Sulawesi needs to integrate networks with industrial areas and flagship commodities.

"Kalimantan doesn't even have a railway network. This is a great opportunity for us to build from the beginning with better planning, including to support logistics and commodities," he said.

To realize the development of the network to around 14,000 kilometers (km) in addition to the reactivation of the line, the investment needs are estimated to reach Rp. 1,100 to Rp. 1,200 trillion until 2045.

"The number is indeed large, but this is a long-term investment for the future of Indonesia. We cannot just rely on the state budget. There must be creative financing, collaboration with the private sector and the involvement of various parties," explained AHY.

Furthermore, AHY emphasized the importance of the role of local governments in supporting the development of public transportation, especially through the allocation of more proportional budgets.

"Regional revenue from the transportation sector is actually quite large, but spending on public transportation is still low. This needs to be encouraged so that it is more balanced and targeted," he said.

According to AHY, the development of national railways must be carried out in an integrated manner with spatial planning and regional growth.

"We can't build a train partially. It must be integrated with the spatial layout, economic centers and community needs. This is a big job that requires the synergy of all parties," he added.