Railway industry: Indecisiveness in used commuter train import policy
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 - Maju mundur kebijakan impor KRL bekas
10 May 2023
By: Widya Islamiati & Lorenzo A. Mahardhika
Jakarta - The step of PT Kereta Commuter Indonesia to rejuvenate their fleet by importing used commuter trains from Japan is currently hindered by technical ministries. On the other hand, the Commuter Line operator is directed to order domestic trains.
The ambition of PT Kereta Commuter Indonesia, a subsidiary of PT Kereta Api Indonesia, to import 10 used trainsets from Japan is potentially just a fantasy.
Until now, the Industry Ministry is still reluctant to issue a technical recommendation to import used commuter trains from Japan.
Industry Minister Agus Gumiwang Kartasasmita said that, until now, he has been choosing to follow the result of the review from the Development Finance Comptroller (BPKP).
In BPKP’s review result to the Coordinating Ministry for Maritime Affairs and Investment, they mentioned that there were four main conclusions.
First, the plan to import used commuter trains does not support the development of the national railway industry. It refers to 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 an import must meet several technical specifications, one of them is prioritising domestic products.
Second, the Trade Ministry has provided a response regarding the dispensation request regarding importing used commuter trains, which stated that the request could not be considered. The government’s focus is to improve domestic production and substitute imports through the increase in the use of domestic products (P3DN).
Third, the used commuter trains that will be imported from Japan do not meet the criteria as used capital goods that can be imported.
It is in line with Government Regulation No. 29/2021 that regulates the regulation and the arrangement on imports that mentions used capital goods that can be imported are used capital goods that cannot be provided by domestic sources.
Fourth, BPKP explained that there were currently 1,114 units of operating commuter trains. They do not include the 48 units that are fixed assets that ceased to operate and 36 units that are temporarily conserved.
Overall, the occupancy in 2021 was 62.75% of the occupancy in 2019. So, in 2024, the occupancy is predicted to reach 75%. In 2025, it is predicted to reach 83%.
BPKP also compared the size of the fleet in 2019 that reached 1,078 units to serve 336.3 million passengers. On the other hand, the number of passengers in 2023 is predicted to reach 237.6 million people, while the size of the fleet reaches 1,114 units.
Besides referring to BPKP’s review result, Agus stated that the settlement of the polemic on importing used commuter trains from Japan has been agreed on at the coordination meeting that was attended by several ministries.
“We have yet to issue a recommendation to import the commuter trains,” he said at the Industry Ministry Office in Jakarta on Tuesday (9/5).
Agus also does not deny the possibility that the Industry Ministry can issue the recommendation to import the commuter trains if BPKP changes their mind to agree to the import of used commuter trains. “If they say not yet, we cannot import the commuter trains,” Agus added.
During a separate occasion, Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan mentioned that his agency was still discussing the plan to import several used commuter trains from Japan.
Several institutions are also involved in the discussion to import the used commuter trains after BPKP has denied the idea. However, Luhut stated that he preferred rejuvenating commuter trains domestically.
“We are still studying it, but, if you ask me, I prefer to produce [the trains] domestically,” Luhut said on Tuesday (9/5).
So, what about the State-owned Enterprises (SOE) Ministry? SOE Minister Erick Thihir stated that he has held a discussion with Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan, Industry Minister Agus Gumiwang Kartasasmita, Transportation Minister Budi Karya Sumadi, and House of Representatives (DPR) Commission VI.
Erick explained that the SOE Ministry was still reviewing the production capacity of PT Industri Kereta Api (Inka). Inka has two winning qualities, they are domestic and are working together with the best carriage producer in the world, Standler. However, he reckoned that there was a note that states Inka’s EBITDA is still negative. So, Inka needs support in the form of cash flow.
Recalculate
Besides that, he stated that he needed to recalculate the carriage requirement of PT KAI. Erick stated that he would deny the import if there were irregularities in the commuter train import, and he was ready to ask BPKP to hold another audit.
“However, if we need [to import], then we are open [to the option]. However, we need to sit with the same data. If there is corruption, I will take care of it,” he said as quoted by Antara.
According to him, PT Kereta Commuter Indonesia and Inka have agreed on a contract to procure commuter trains. Both parties have agreed to procure 16 trainsets worth Rp3.8 trillion that will be completed in 2025.
Besides that, Erick has asked PT Kereta Api Indonesia to prepare a passenger growth forecast after the Covid-19 pandemic.
“I have asked KAI to prepare a passenger growth forecast after the Covid-19 pandemic. During the pandemic, the number of passengers was different,” he said.
Erick believes that one of the solutions for public transportation is trains. The railway mode of transportation can supress the use of private vehicles, reduce the reliance on importing fuel, and support the transition to electric vehicles.
“Hence, we are talking with Japan. Moreover, G7 will be held. We will talk about how to remap the railway condition in Java, Sumatra, and Madura,” he said.
Erick revealed that public transportation would be the priority in the future. Hence, Erick mentioned that the option to import used commuter trains from Japan was still open. One of the important points discussed by the government regarding the option to import used commuter trains is the price. Erick said that the government would not choose the emergency import option if the trainsets purchased would burden the state’s finance. “We are still open to the import option as long as the price is right,” Erick said.
PT Kereta Commuter Indonesia (KAI Commuter) Corporate Secretary VP Anne Purba said that, regarding the commuter train import, her company was continuously coordinating with related ministries and institutions.
She also guarantees that she is ready to carry out the recommendation from BPKP’s audit. “Besides the import option, there is also the retrofit recommendation. We are cooperating with Inka to procure 16 trainsets,” she explained.
Anne said that rejuvenation was needed to be conducted soon. Moreover, the passenger growth of Greater Jakarta Commuter Line has the potential to surpass 2 million people per day due to the trend of using railway-based transportation.
