MRT, LRT, and high-speed railway have massive and wide economic impacts
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.
Investor Daily - MRT, LRT, dan kereta cepat miliki dampak ekonomi besar dan luas
11 July 2023
By: Tri Murti and Nasori
Jakarta - Jakarta MRT, Jabodebek LRT, and Jakarta-Bandung High-speed Railway (KCJB) are believed to have wide and massive impacts. Besides creating a more efficient transportation system, the three modes of transportation can create new economic activity centres and become new state revenue sources. The chance of building new cities is increasing in areas where KCJB stations are located.
Moreover, during the construction of the three modern rail-based mass transportation, economic output increased by hundreds of trillions of rupiah. For example, Jakarta MRT phase 1 (Lebak Bulus-Bundaran HI spanning 16 kilometres) and phase 2 (Bundaran HI-Ancol Barat spanning 11.8 kilometres) have the potential to increase economic value by more than Rp820 trillion.
However, to make a more optimum economic impact, the government needs to issue regulations that truly support the creation of borderless intermodal transportation, so the people’s mobility can be faster and economic activities can develop. Besides that, the conditions to make investments around LRT, MRT, and KCJB stations must be relaxed so that the regions can develop rapidly.
That is the summary of the views collected by Investor Daily from several sources on separate occasions.
They are West Java Governor Ridwan Kamil, Cabinet Secretariat Transportation and Public Works Deputy Assistant Faisal Yusuf, PT Kereta Cepat Indonesia China (KCIC) Corporate Communication Manager Emir Monti, PT Adhi Commuter Properti Tbk President Director, transportation observer Djoko Setijo warno, and Institute for Development of Economics and Finance (Indef) Programme Director Esther Sri Astuti.
Tomorrow on Wednesday (12/7/2023), Jabodebek LRT will carry out trial operation before commercially operating on 18 August 2023. Jabodebek LRT is one of the modern rail-based mass transportation that is aggressively developed by President Joko Widodo (Jokowi), even when he was acting as Jakarta governor. Meanwhile, Jakarta MRT has been officially operating since 24 March 2019 and KCJB is scheduled to carry out limited operation in the middle of August 2023.
Ridwan Kamil stated that, with KCJB traveling through Walini, the chance to build new cities in the region was increasing. “So, building new cities in Walini is a possibility,” Ridwan stated.
He explained that new cities could also be built in other regions, such as Karawang and Tegalluar. “Several million jobs will be created, which will result in welfare. Inshallah (God willing), it can be realised with the progress and the advancement of this project,” Ridwan said.
According to him, the high-speed railway is not the end goal, but it is an instrument or a media to create the growth of new cities. “If there is no new city to act as growth centres, agglomeration [can occur] and metropolitan areas will be too crowded, such as Greater Bandung (Bandung Raya) and Greater Jakarta (Jabodetabek),” the Architect stated.
KCJB is the first high-speed railway in Southeast Asia. It will have four stations that consist of Halim Station (Jakarta), Karawang Station (Karawang), Padalarang Station (West Bandung Regency), and Tegalluar Station (Bandung Regency).
A similar opinion was stated by KCIC Corporate Communication Manager Emir Monti. According to him, KCJB will not only be a transportation facility and an infrastructure, but it will also improve the economy in regions where it travels through. The high-speed railway will grow new economic centres where business players can invest in areas around the stations to create new destinations for the people.
“Tourism locations, business centres, or housing can be developed around the regions. Regional income will indirectly increase the high-speed railway’s passengers,” Emir said to Investor Daily on Monday (10/7/2023).
KCIC has made a large investment during the construction period of KCJB to improve the economy of the regions where it travels through. For the amount of investment made in the regions, KCIC was awarded by Purwakarta Regency Government and Karawang Regency Government. “On the one hand, regional income will increase. On the other hand, the people will receive compensation from land acquisitions, and they will also receive the benefits,” he stated.
The involvement of locals in the construction of KCJB as workforce and the ongoing recruitments will provide work opportunities for the people. “They show that the high-speed railway has a multiplier effect on Indonesia’s economy,” Emir stated.
More productive
Furthermore, Emir said that, with a travel duration of 30-45 minutes, KCJB would cut more travel time compared to regular trains and cars. Distance is no longer an issue to travel between two major cities in Indonesia, so the people can be more productive.
Meanwhile, PT Adhi Commuter Properti (ADCP) President Director Rizkan Firman said that the commercial operation of Jabodebek LRT this year was a positive catalyst for the company. “ADCP was optimistic about the marketing sales target in 2023 that grew 50% compared to 2022,” he said to Investor Daily some time ago.
He affirmed that the prospect of the property sector, especially transit-oriented development (TOD) housing, continued to be positive. The people’s perspective towards housing developed by ADCP is also excellent. It can be seen from ADCP’s marketing sales in the first quarter of 2023 that reached Rp235 billion.
