INDONESIA AS NEW EMERGING MARKET

Friday, April 28, 2006

NEW RAILROAD TRACK WILL BE BUILD

The Jakarta Post, Jakarta

The government is planning a major rail and expressway building program to link industrial zones located near Jakarta to ports and airports so as to increase the attractiveness of the zones to investors.

Director of Turnpikes and Urban Affairs at the Public Works Ministry, Nurdin Manurung, said in Jakarta on Wednesday that the government would build a Rp 2.36 trillion (US$253 billion) highway linking industrial areas in Cikarang, West Java, to Tanjung Priok harbor in North Jakarta. It was expected that the new expressway would be completed in 2009.

He said that in addition, the government would also build an expressway connecting Cikampek in West Java with the Jagorawi (Jakarta-Bogor-Ciawi) turnpike at Cileungsi, the Tanjung Priok Access Highway linking the proposed Cikarang-Tanjung Priok highway with the Jakarta inner ring road at Sunter, North Jakarta, and a flyover at Cikarang.

"These projects will cost Rp 7.5 trillion in total and will be completed between 2008 and 2011," he explained.

He said that they were designed to provide the sort of transportation infrastructure that was needed to allow industry to grow.

The latest figures for February show that the vehicle-to-capacity ratio on the Jakarta-Cikarang route stood at 1.36 and Cikarang-Cikampek route at 1.16, compared to the accepted tolerable ratio of 0.6.

Nurdin acknowledged that the congestion was also caused by imbalances in the utilization of transportation modes as 90 percent of freight was transported by motor vehicles, while railway and sea transportation had yet to be used as much as it could.

At the present time, Indonesia has 6,482 kilometers of railway track in place in Java and Sumatra. Of this figure, 2,122 kilometers are disused.

Expert advisor at the Transportation Ministry, Cucuk Suryo Suprojo, said that in order to deal with the congestion problem, the government would also promote the use of railways to support industrial development by building new lines and reopening disused lines linking industrial zones with ports and airports.

"A 30.3-kilometer rail line linking an industrial zone in Tangerang with Soekarno-Hatta Airport will be built between 2007 and 2008 at a cost Rp 490 million," he said.

Meanwhile, a senior official at the Directorate General of Railways, Sugiadi Waluyo, said that a 2.5 kilometer line connecting Pasoso station and Tanjung Priok harbor, which was closed in 1967, would be reopened.

"Because of the closure, traders have to pay additional costs for loading and unloading, as well as transportation by truck, after their freight arrives at Pasoso station," Sugiadi said. "If we reopen the line, their costs will be reduced as their freight will be delivered directly to the port."

"I hope that the project will start next year with the involvement of private sector investors," he said.

He added that the government also planned to build a number of container terminals and freight yards in industrial zones in West Java, such as Gedebage in Bandung, Cibungur in Purwakarta and Cikarang.

Indonesian Industrial Estate Association chairman Johannes Archiadi responded positively to the plan.

"I think that rail is the most efficient and effective way of overcoming the transportation problems faced by industrial zones," he said. "The construction of railway infrastructure costs less than building highways and the operation of trains is cheaper than trucks."

Johannes expressed the hope that private sector investors would participate in the development of the railway infrastructure so badly needed by industry.

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