Rail-based mass transportation: Prepare to 'fast' in importing used trains
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Angkutan massal berbasis rel: Bersiap ‘puasa’ impor KRL bekas
10 April 2023
By: Khadijah Shahnaz & Hendra Wibawa
The recommendation from the Development Finance Comptroller (BPKP) on the facility procurement plan for PT Kereta Commuter Indonesia was finally issued on 29 March 2023.
The review report from BPKP to the Coordinating Ministry for Maritime Affairs and Investment mentions that there are four main conclusions.
First, the plan to import used trains does not support the development of the national railway industry. This is also based on Transportation Minister Regulation No. 175/2015 on Technical Specification Standard for Normal Speed Railway with Its Own Propulsion.
One of the articles in the regulation mentions that imports must meet the technical specification, which is to prioritise domestic products.
Second, the Trade Ministry has responded to the proposal to provide a dispensation for the used trains by stating that the proposal cannot be considered. The government’s focus is to increase domestic production and substitute imports through domestic product use intensification (P3DN).
Third, the used trains that will be imported from Japan do not meet the criteria as imported used capital goods. This is in line with Government Regulation No. 29/2021 that regulates import policies and regulations that mention that imported used capital goods must be used capital goods that cannot be fulfilled domestically.
Fourth, the BPKP explained that there were 1,114 units of trains currently operating, which do not include 48 suspended fixed assets and 36 temporarily conserved units.
Overall, the occupancy in 2023 reaches 62.75% of the occupancy in 2019. In 2024, it is predicted to reach 75% and 83% in 2025.
BPKP is also comparing the ready-to-use fleet in 2019 that reached 1,078 units that could serve 336.4 million passengers. On the contrary, in 2023, the number of passengers is predicted to reach 237.6 million people while the fleet reaches 1,114 units.
The BPKP’s review report conclusion that does not recommend importing used trains from Japan was delivered by Mining and Investment Coordination Deputy of the Coordinating Ministry for Maritime Affairs and Investment Septian Hario Seto in Jakarta on Thursday (6/4).
Besides stating the four conclusions, he added that BPKP also found irregularities in the estimated cost to import the used trains from Japan.
Septian explained that the irregularities were related to the estimated cost to import the used trains by PT KCI that did not carry out the calculation based on the applicable cost survey.
“Only based on the train procurement cost in 2018, which is increased by 15% [for inflation],” he added.
The cost to transport the used trains is also not in line with the calculation. BPKP’s clarification to PT Pelabuhan Indonesia (Persero) found that the containers that would be used were not sufficient. Currently, the capacity of the containers are 20 feet and 40 feet. This will force the trains to be transported and delivered using cargo ships. “It can increase the cost, which should have been estimated accurately,” he said.
Septian also stated that KCI was suggested to revitalise the fleet by retrofitting old trains that will be retired in 2023-2024.
The retrofit option was positively received by PT Industri Kereta Api. According to Inka, retrofitting can prolong the life of the used trains from Japan by 10 years as retrofitting replaces or renews the technologies and features on the old trainsets.
Several benefits from the retrofit option are that it is more efficient, requires little maintenance, and guarantees the availability of spare parts.
Best solution
A response to BPKP’s review report came from the Transportation Ministry. Transportation Ministry spokesperson who is also a Special Staff to the Transportation Minister for Human Capital Management and Communication Adita Irawati stated that the transportation regulator would look for the best solution to revitalise the commuter line after BPKP’s review report.
According to her, the Transportation Ministry will immediately carry out discussions with other stakeholders as BPKP’s audit does not recommend importing used trains from Japan.
“The review report from BPKP on importing used trains for PT Kereta Commuter Indonesia mentions that the plan to import the trains does not fulfil the criteria. We are supporting the suggestion from House of Representatives (DPR) Commission V to follow up BPKP’s findings,” Adita said on Sunday (9/4).
She continued that the Railways Directorate General of the Transportation Ministry has stated a technical recommendation on revitalising Greater Jakarta commuter line on 19 December 2022.
In line with the technical recommendation, the Transportation Ministry is supporting the effort of PT Kereta Commuter Indonesia to use domestic trains by signing an MoU regarding the new facility order with PT Inka.
On the other hand, Adita mentioned that there was an urgent need to revitalise the commuter line that has entered the retirement period. “So, there is a longing from PT Kereta Commuter Indonesia to purchase used facilities,” she explained.
A similar statement was stated by Special Staff to SOE Minister III Arya Sinulingga. He affirmed that BPKP’s conclusion would be discussed with related ministries. Arya stated that every ministry had their own considerations regarding the additional commuter line fleet.
“So, we just need to discuss it together. There are the Coordinating Ministry for Maritime Affairs and Investment and the Transportation Ministry. The Transportation Ministry will calculate what the solution will be,” Arya said.
Besides that, Arya affirmed that several ministries would consider the needs and the regulations to obtain the right solution.
Moreover, the need for trains is quite high as train passengers are increasing.
PT KCI or KAI Commuter Corporate Secretary VP Anne Purba stated that she was committed to following up the government’s direction as the used train procurement process would only commence after BPKP’s review report.
KAI Commuter is currently continuing the study to revitalise the commuter line through retrofitting. Besides that, the PT KAI subsidiary is also programming the procurement of new trains so that the plan to provide the best service for users in the long term can be prepared excellently.
“We hope that we can collaborate to make the commuter line better in the future to provide optimum services,” she said recently.
The final decision on importing used trains from Japan is still waiting for the inter-ministry meeting. If BPKP’s review report is made a reference, KCI and its parent company, PT KAI, have to take strategic steps to increase the fleet through a new procurement scheme or retrofitting.
Even though new procurement or retrofitting are expensive, at least they benefit the national industry.
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