Light rail transit: Competing for railway project in Bali
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 - Lintas Raya Terpadu: Berebut proyek ‘Ular Besi ’di pulau Bali
18 June 2024
By Lorenzo A. Mahardhika and Hendra Wibawa
Several countries are interested in funding phase 1A of the light rail transit (LRT) project in Bali, which is valued at Rp14.2 trillion. This interest follows the completion of a feasibility study conducted by a consortium from South Korea.
Like moths to a flame, the LRT project in Bali attracts many investors, both local and international. This surge of interest follows the recent release of a feasibility study by the Transportation Ministry, which was conducted by Korea National Railways (KNR) with a grant from Korea Exim Bank.
Based on the study, phase 1A of the Bali LRT spanning 6.04 kilometres (km) requires approximately US$876 million or Rp14.2 trillion.
The Bali LRT is planned to have an underground route from I Gusti Ngurah Rai Airport to the Sunset Road area. Phase 1A of the Bali LRT will have five stops.
The Bali LRT is planned to be constructed underground due to the environmental conditions along the route. The route is densely populated, making construction at ground level or on elevated tracks difficult.
Following the feasibility study, phase 1A of the Bali LRT project is now set to undergo a planning study. This study will include both the basic engineering design (BED) and the detailed engineering design (DED).
The project must also be complemented by an environmental impact analysis (AMDAL), a land acquisition and resettlement plan, and adequate funding.
Regarding funding, the Bali LRT is part of the Bali Urban Railway programme, which will be financed through loans. Several foreign investors have expressed interest in participating in the project.
Railways Director General of the Transportation Ministry Risal Wasal revealed that the plan to fund the prestigious project would be realised through offshore loans. He mentioned that several potential investors were interested in funding the project.
“The United Arab Emirates is interested, and the United Kingdom is too. There are many countries interested in constructing a railway system in Bali,” Risal said in Makassar, South Sulawesi, last weekend.
According to him, the project's funding scheme must be proposed through the National Development Planning Ministry/National Development Planning Agency (Bappenas) to be included in the blue book and the green book.
Projects listed in the blue book have been approved by Bappenas, while those in the green book have been approved to receive funding.
“We are waiting for its inclusion in the blue book, so financing for phase 1A of the Bali LRT can be processed further,” he explained.
Risal said that phase 1A of the Bali LRT would have five stops at I Gusti Ngurah Rai Airport, Kuta, Pura Desa Afat, Central Park, and Sunset Road stations. The depot is planned to be located in Seminyak. The LRT route to Seminyak will be constructed at ground level.
Risal emphasised that the Bali LRT was part of the Bali Urban Railway programme, aimed at developing mass transportation in Bali. One key aspect of the Bali Urban Railway programme is providing feeder services for the Bali LRT.
“They will offer feeder services. For instance, upon arrival at Central Park, passengers can board transportation services provided by the regional government,” Risal stated.
In the future, Bali Provincial Government through the Bali Urban Railway programme could continue the next phases of the LRT development.
Currently, the main focus of the Bali Urban Railway programme is to improve access for local residents traveling to and from the Bali LRT stations.
High cost
Institute for Transportation Studies (INSTRAN) Executive Director Deddy Herlambang reckoned that public transportation development in Bali was urgent. According to him, public transportation facilities are required to reduce traffic congestion from and to I Gusti Ngurah Rai Airport.
However, he suggests avoiding constructing the Bali LRT underground as planned in the feasibility study due to its high cost.
“Constructing the LRT underground is unnecessary due to its high cost, which we cannot currently fund given our heavy debt burden,” Deddy said.
It is better to construct the Bali LRT at ground level or on elevated tracks.
For example, he proposed constructing elevated tracks for the LRT at a height of 15 metres. Bali's regulations specify a maximum building height of 15 metres. Therefore, he concluded that building the Bali LRT route at ground level would be more cost-effective compared to elevated or underground construction.
“Considering the conditions in Bali, constructing the LRT route at ground level would be preferable. This approach would be easier and preserve the city's aesthetics,” Deddy stated.
Besides Bali, the Transportation Ministry also recently offered an urban railway project in Bandung to Chinese investors.
Risal explained that Bandung Local Government has a concept for constructing a railway network in the region. Currently, the local government is seeking an efficient and optimal system to finance its operations.
“They are looking for the most efficient train for the public transportation system. There is a new railway [system] that is more efficient that we are discussing,” Risal explained.
The Bandung urban railway is one of the projects offered by Indonesia to investors at the 17th Shanghai International Exhibition for Intercity and Urban Mass Transit (Rail+Metro China 2024) in China.
The Bandung urban railway was selected as one of the projects offered due to its strategic role in accommodating high public mobility and connecting the Whoosh high-speed railway to economic centres in the metropolitan area.
The Bandung urban railway project is forecasted to have an investment return rate of 11.9%, supported by a viability gap fund of 49%.
Given this significant potential, the Transportation Ministry are providing an opportunity for investors to participate in the Bandung urban railway project through the public-private partnership (PPP) scheme with a concession period of up to 30 years.
