Limited urban transportation hinders economic growth
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 - Keterbatasan angkutan perkotaan hambat pertumbuhan ekonomi
By Heru Febrianto and Ichsan Amin
Jakarta, ID – The lack of urban transportation in Indonesia is hindering national economic growth. Therefore, a suitable strategy is needed from the government to answer the high demand for urban public transportation.
Since 2020, the government has implemented the Buy The Service (BTS) scheme for urban transportation in Indonesia. This initiative was launched to address the high demand for urban public transportation that meets the minimum service standards (MSS). This year, the BTS scheme has been implemented in 10 cities, namely Palembang, Medan, Bali, Surakarta, Yogyakarta, Makassar, Banyumas, Banjarmasin, Bandung, and Surabaya. However, several regions will be managed by local governments moving forward.
Transportation Minister Budi Karya Sumadi said that the Transportation Ministry continuously pushed regional governments to provide urban public transportation. This is expected to reduce the use of private vehicles, addressing traffic congestion.
He mentioned that Jakarta can serve as an example for other regions in developing urban public transportation. Jakarta Provincial Government has subsidised various public transportation systems, such as TransJakarta. These subsidies make the TransJakarta fare more affordable for passengers.
“Jakarta is an exemplary city that other cities must follow. I talked with passengers who enjoy using TransJakarta with fares set at Rp3,500. Before 7.00 a.m., the fare is only Rp2,000. Therefore, I encourage citizens to use public transportation,” Budi Karya said in Jakarta recently.
On a separate occasion, Road Transportation Director of the Land Transportation Directorate General of the Transportation Ministry Suharto explained that this year, the government allocated a budget of Rp444.69 billion to subsidise road-based urban public transportation through the BTS scheme. This initiative is called Teman Bus.
“We hope citizens will take advantage of the Teman Bus initiative. Regional governments are expected to awareness campaigns to promote the use of public transportation. In the future, regional governments are expected to maximise their budget to implement urban mass transportation,” Suharto stated.
Furthermore, Suharto explained that based on a survey conducted by the Land Transportation Directorate General among Teman Bus passengers in 10 cities, most respondents reported that the initiative saved them between 30%-70% on their monthly transportation costs.
This demonstrates that the Teman Bus initiative effectively reduces the transportation costs of citizens, especially with the tariff integration from the BTS scheme.
Additionally, based on the survey results, it turns out that 72% of Teman Bus passengers previously used motorcycles. Suharto noted that the number of citizens who switched from motorcycles to Teman Bus increased to 72% in 2023, up from 61% in the previous year.
“The transition rate exceeding 70% from motorcycles indicates growing interest in using public transportation. We hope that Teman Bus can help reduce traffic accidents and congestion in major cities,” he stated.
He mentioned that the survey also revealed an increase in passengers shifting from cars to Teman Bus users, rising from 5% in 2022 to 23% in 2023. From 2020 to 2023, Teman Bus has served a total of 72,138,046 passengers, averaging 70,496 passengers daily.
Public transportation is more effective and efficient compared to private vehicles as one vehicle can carry more passengers. Therefore, this mode of transportation will be continuously developed in urban areas as a solution to address traffic congestion.
However, the provision of public transportation is not yet a priority programme for most regional governments compared to healthcare, education, and four other aspects outlined in Law Number 23 of 2014 on Regional Administration. For example, education has a designated budget in the regional state budget (APBD). Meanwhile, transportation does not have a clear budget in the APBD with each region's allocation varying based on the perception of its regional head regarding transportation issues.
transportation should be designated as a basic service to ensure that regional heads share a unified vision and mission in providing transportation services, particularly in the implementation of public transportation in the future.
The lack of public transportation is a widespread issue throughout Indonesia. Jakarta stands out with a satisfactory range of options including the MRT, LRT, BRT, Commuter Line, and feeder transportation integrated through the JakLingko payment system. Despite this, according to a public transport survey, only 15.4% of Jakarta's population utilises public transportation. Out of 10.68 million individuals, 78.7% still use private vehicles, while bicycle users make up 1.4% and pedestrians 4.5%.
Four BTS components
The BTS scheme provided by the Land Transportation Directorate General includes four components, operations, human resource competence, fleet maintenance, and supervision.
Customer satisfaction with public transportation implementing the BTS scheme reaches 79.14% due to improved punctuality. Under the BTS scheme, buses operate according to standardised procedures, such as maintaining a 15-minute headway.
Besides that, the BTS programme also implements non-cash payment.
Various inputs from different parties will be considered to optimise the service. Local regional governments can objectively assess the quality of existing services. If the service is already satisfactory, then other service corridors can be developed based on the fiscal capacity of each regional government.
Cities that have not yet implemented BTS can prepare themselves by observing its implementation in the 10 cities where it has been rolled out. BTS represents the government's support for the people, particularly in enhancing public transportation services.
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