Transportation Minister confirms eventual merger of MITJ and KCI
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 - Menhub pastikan MITJ dan KCI akan merger
3 November 2022
By: Tri Murti
Transportation Minister Budi Karya Sumadi ensures that the merger of the regional state-owned enterprises (BUMDs) PT Moda Integrasi Transportasi Jabodetabek (MITJ) and PT Kereta Commuter Indonesia (KCI) will be implemented.
“The merger between MITJ and KCI will be based on the due diligence process, BPKP’s assessment, and other aspects that are financial and legal in nature. Principally, it must be conducted,” Budi Karya said at the presidential palace in Jakarta on Wednesday (2/11/2022).
According to the Transportation Minister, the valuation of both companies are still being calculated by the Development Finance Comptroller (BPKP), while the study on the legal aspect is being conducted by the Attorney General's Office.
“So, once again, it is not an acquisition, but we cannot put aside the financial and legal aspects. We carry out due diligence for both. That process cannot be skipped. We cannot just sign immediately,” Budi Karya revealed.
According to the Transportation Minister, the purpose of merging both companies is to build urban mass transportation.
“The President affirmed that urban mass transportation must be controlled excellently to complete existing projects and plan or build mass transportation themselves,” Budi Karya added.
Moreover, cumulatively, loss if mass transportation is not provided can reach Rp100 trillion in one year.
“Mass transportation is required as an example. Jakarta is one of the most representative cities that is used as an example. There are MRT (mass rapid transit), LRT (light rail transit), and BRT (bus rapid transit). So, this is a capital for Jakarta and other cities,” Budi Karya revealed.
According to him, railways must be managed by a single institution so that there are no overlapping policies.
“One of the President’s points is so that regional governments think about feeders for the mass transportation. For example, regarding Jabodebek LRT, it is necessary for regional governments of Bogor, Bekasi, and Jakarta to provide buses and other transportation for the first mile and last mile,” Budi Karya added.
So, there is no other modes of transportation that operate on the same level as Jabodetabek LRT that can suppress the number of LRT passengers.
“It has been agreed that Jakarta and South Sumatra regional governments will support the meeting points, such as stations,” he said as quoted by Antara.
During the G20 Summit in Jakarta, the Transportation Minister also mentioned that cooperation among KAI and the Transportation Ministry and investors from Japan, South Korea, and the UK will also be signed.
LRT connected to Manggarai
Meanwhile, the Transportation Minister agrees to the suggestion developed by Acting Jakarta Governor Heru Budi Hartono to connect Jakarta LRT to Manggarai Station. The Transportation Minister revealed that Manggarai is forecasted to be a central station for railways in Jakarta as it fulfils the requirements for short-distance and long-distance railway public transportation.
The Transportation Minister revealed that the Acting Governor suggested to connect Jakarta LRT from Velodrome Station in Rawamangun to Manggarai Station and to add more routes to Halim Station during the internal meeting led by Indonesian President Joko Widodo regarding the development of Jakarta LRT and Palembang LRT at the presidential palace in Jakarta on Wednesday.
“The governor suggested it to be connected to Manggarai, and I fully agree. Why? Manggarai is a central station for long-distance and short-distance trains. All [trains] are at Manggarai, including the airport train,” Budi Karya said to the media after the meeting.
“So, if there are additional routes from Velodrome to Manggarai, the number of passengers going outside the city and to the airport will increase. On the other hand, passengers from the airport can go to Manggarai with a relatively short headway,” he said.
According to the Transportation Minister, the connection of the Velodrome-Manggarai route for Jakarta LRT will be established soon before the construction of phase 3 that covers Dukuh Atas Station.
Previously, Acting Jakarta Governor Heru Budi, on Friday (28/10), stated that he has not ensured the continuity of Jakarta LRT project phase 2A as he is considering Jakarta Provincial Government’s budget priority.
“Later, we will see if it can be continued. It can be continued by the next governor in 2024,” Heru said.
Hence, he continued his agency would discuss the project in an independent discussion, including financing options for the project that connects Pegangsaan Dua Station in Kelapa Gading with Jakarta International Stadium (JIS).
LRT project phase 2A goes through six stations, namely Britama, Artha Gading, Sunter Timur, Gelanggang Remaja, Sunter Barat, and JIS, and it spans 8.2 km. However, the construction budget for LRT phase 2A is not included in Jakarta’s 2023 draft regional budget.
