Development of Multimodal Transport in North Java CorridorScoping Study

2

Study focus

Development Theme

Driver for national industry and services provision

Economic centresJakartaBandungSemarangYogyakartaSurabaya

Main economic activity

Food and beverageTextileTransportation EquipmentShippingICTDefence EquipmentGreater Jakarta Area

“to ensure that the infrastructure, services and facilities that areprovided in the Corridor meet the needs of the users of thetransport system, and especially the needs of main economicactivities of the corridor as identified in the MP3EI”

3

Study context

National Logistics System

Multimodal Transport StrategyNRMP NPMP

Road system plans

4

Mode choice in principle

Distance

Flow concentration

Cargo value

Cargo perishability/fragility

Cargo density

Road Rail Sea

Low

Low

High

High

Low

High

High

Low

Low

High

5

Domestic container movements by sea (Java)

6

Geographical Pattern of Intra-Java Freight Flows

0 1000 2000 3000 4000

Banten

DIY

DKI

Jawa Barat

Jawa Tengah

Jawa Timur

Destination

Million tonnes

Ori

gin

Banten DIY DKI Jawa Barat Jawa Tengah Jawa Timur

7

Fertiliser, 600,000

Silica, 7,874

Iron Ore, 180000

Petroleum, 496,000

Cement, 450,000

Container, 400,810

Parcel (multiproduct), 110,854

Antaboga (multiproduct),

243,000

Other multiproduct, 130,792 Steel, 25,731

Existing rail freight task (Java) – excl coal.

Source: KTPA, 2012

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Key Obstacles to Efficient Multimodal Freight Transport in the Java Corridor

GROUP KEY ISSUES

ROAD ISSUES Slow delivery of expressway system

Overloading

Congestion

Suboptimal road investment prioritisation

Distortion due to fuel subsidies

RAIL ISSUES Lack of network capacity

Limitations on train weights and dimensions

Lack of competition

MARITIME ISSUES Limited port capacity

High port access costs

Unreliable port performance

High cost and unreliability of domestic shipping services

MODAL

INTERCONNECTIVIT

Y ISSUES

Poor rail access to port terminals

Scarcity and poor performance of intermodal terminals

Lack of intermodal focus in planning and system management

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Some surprises

• Truck costs are not as high as expected relative to other

modes. This reflects fuel subsidy, lack of RUC and probably

high level of overloading

• Truck travel times are not as low relative to other modes as in

other places. This appears to reflect traffic congestion and

restrictions on truck operation in cities.

• Some high value goods which we would normally expect to

travel by truck are shipped using sea mode (for security

reason), i. e.: electronics and car

• Some low value goods that seem natural targets for rail travel

by road: for example, around 300 trucks each carry 30 tons of

coal daily from Cirebon to Bandung for textile factories around

Bandung.

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Targeting the right cargoesCommodity Comments

Existing bulk traffics Need to avoid complacency

Steel Krakatau steel already sends cargo by both rail and sea, and is interested in increasing non-road share. Also significant growth with the Posco Krakatau steel development.

Port-relatedcontainers

Pressure on landside access to ports will make increased use of rail imperative. Also port-related movement tend to be better suited to rail because there is not – or need not be – a truck distribution leg at the port end.

Niche bulks Rail already has a position in many bulks, but some customers –e.g. cement – have an interest in increasing their use of rail

Java-Sumatrafreight

The need to make the Straits crossing, congestion at the ferry and relatively long distances make this trade a priority target for ro-roshipping services

Automotive A more difficult target for rail, but at least one major manufacturer is interested in considering and rail is quite widely used in other countries.

Jakarta-Surabaya general cargo

It will be difficult for rail or sea to be sustainably profitable in these cargoes, but both rail and sea currently play a minor role in thecarriage of these cargoes. Double-tracking should improve competitive position of rail.

Low

hanging

fruit

More

difficult

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RIGHT infrastructure and services

Immediate(before 2014)

Complete Jakarta-Surabaya double-trackingImprove access links to major portsImprove facilities for handling motor vehicles at T PriokPromote use of full potential of existing intermodal terminalsDevelop common user terminal at CilegonDevelop Cikarang-Surabaya rail services

Mediumterm(2015-2019)

Provide additional container capacity at T Priok and T PerakEnsure all new terminal developments have high quality road and rail accessCreate network of intermodal terminals/dry portsExpand ro-ro services between Sumatra and JavaDevelop specialist rail services for automotive industry

Longer term(2020 and beyond)

Create freight only rail links in congested section of the networkIncrease structural strength of key rail freight links

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The RIGHT supporting policies

Immediate(before 2014)

Set and monitor KPIs for cargo handling performance at key portsAdopt new road design standards for all of strategic freight networkFormally establish peak logistics industry consultative bodyRemove fuel subsidy for heavy diesel fuelsDefine and implement rail track access chargeFoster competition in container terminal servicesModernise PTKAI rolling stock (commence)Adopt point-of-origin approach to enforcement of vehicle limitsFurther streamline customs clearance proceduresIntensify congestion management efforts in major citiesInclude multi-modal transport priority actions in Renstra

Mediumterm(2015-2019)

Restructure government institutions to better support multimodal transportDevelop national road freight strategyProgressively introduce road pricing schemeTrial new approaches to expressway deliveryRevise procedures for prioritising road capacity improvementsRestructure PKAI on business linesProvide customs clearance at all dry portsIntegrate transport considerations into industrial estate planning

Longer term Introduce vehicle booking systems at T Priok and T Perak

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Reform Themes and Supporting ActionsTHEME ACTION ITEM

Improving land transport access to ports

1: Construct Tanjung Priok rail link

2: Complete Tanjung Priok access road

3: Activate Tanjung Perak rail connection

4: Accelerate proposed expressway links to Tanjung Perak

5: Ensure high quality access road to Kalibaru

6: Incorporate planning for rail links in new terminal developments

Delivering increased port capacity

7: Set and monitor Key Performance Indicators (KPIs) for cargo handling performance at key ports

8: Promptly deliver increased container port capacity

9: Improve facilities for handling motor vehicles at Tanjung Priok

10: Introduce a vehicle booking system at the main container terminals

Developing freight rail infrastructure and terminals

11: Complete double tracking Jakarta–Surabaya

12: Develop selected freight only rail links

13: Selectively improve rail track strength

14: Promote use of the full potential of existing intermodal terminals

15: Construct a common user rail terminal at Cilegon

16: Develop a network of new intermodal terminals

Strengthening the freight capability of road network

17: Develop a national road freight strategy

18: Adopt new road design standards for all roads in strategic freight network

19: Trial new approaches to expressway delivery

20: Change the way in which road capacity projects are prioritised

Fostering a more competitive environment

21: Remove fuel subsidy on diesel fuel

22: Progressively introduce a road pricing regime

23: Define and implement track access charges

24: Adopt point-of-origin approach to enforcement of weight limits

25: Foster competition in the provision of container terminal services

26: Modernise PT Kereta Api Indonesia (PTKAI) freight operations

Introducing new service models

27: Promote Cikarang–Surabaya rail services

28: Expand Ro-Ro shipping services between Java and Sumatera

29: Develop specialised rail services for automobiles

Improving planning and trade facilitation

30: Formally establish peak logistics industry consultative body

31: Restructure government institutions to support multimodal approach

32: Integrate transport considerations into planning of industrial estates

33: Intensify congestion reduction efforts in major urban centres

34: Further streamline cargo clearance procedures

35: Provide customs clearance at inland terminals

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Indicative Timing for Recommended Actions..1/2

Short Term

(before

2014)

Medium

Term (2015–

2019)

Long Term

(2020 and

beyond)

In Progress

Action 2: Complete Tanjung Priok access road

Action 4: Accelerate proposed expressway links to Tanjung Perak

Action 9: Improve facilities for handling motor vehicles at Tanjung Priok

Action 11: Complete double tracking Jakarta–Surabaya

Committed

Action 1: Construct Tanjung Priok rail link

Action 5: Ensure high quality access road to Kalibaru

Action 8: Promptly deliver increased container port capacity

Action 18: Adopt new road design standards for all roads in strategic freight

network

Action 23: Define and implement track access charges

Action 25: Foster competition in the provision of container terminal services

Action 33: Intensify congestion reduction efforts in major urban centres

Planned

Action 3: Activate Tanjung Perak rail connection

Action 6: Incorporate planning for rail links in new terminal developments

Action 34: Further streamline cargo clearance procedures

Previously recommended

Action 26: Modernise PT KAI freight operations

Action 13: Selectively improve rail track strength

Action 14: Promote use of the full potential of existing intermodal terminals

Action 15: Construct a common user rail terminal at Cilegon

Investigation and preparation Implementation

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Indicative Timing for Recommended Actions..2/2

Short Term

(before

2014)

Medium

Term (2015–

2019)

Long Term

(2020 and

beyond)

Action 16: Develop a network of new intermodal terminals

Action 17: Develop a national road freight strategy

Action 19: Trial new approaches to expressway delivery

Action 20: Change the way in which road capacity projects are prioritised

Action 21: Remove fuel subsidy on diesel fuel

Action 22: Progressively introduce a road pricing regime

Action 28: Expand Ro-Ro shipping services between Java and Sumatera

Action 31: Restructure government institutions to support multimodal

approach

Action 32: Integrate transport considerations into planning of industrial estates

Action 35: Provide customs clearance at inland terminals

New initiatives

Action 7: Set and monitor KPIs for cargo handling performance at key ports

Action 10: Introduce a vehicle booking system at the main container terminals

Action 12: Develop selected freight only rail links

Action 24: Adopt point-of-origin approach to enforcement of weight limits

Action 27: Promote Cikarang–Surabaya rail services

Action 29: Develop specialised rail services for automobiles

Action 30: Formally establish peak logistics industry consultative body

Investigation and preparation Implementation

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Options for Next Step No Initiative Justification Activity Outputs

1. Detailed analysis of specific commodity supply chains (automotive, steel and cement)

To understand what needs to be done for potential commodity to divert to rail, and to provide a basis for estimating the potential size of mode change

Detailed survey on the movement of raw material to final product delivery of specific to improve the understanding on existing commodity movement and its transport system

• Trade and supply chain pattern analysis for each commodity

• Cost and tariff structures• Understanding of barriers to modal

shift in each chain• Estimates of modal share existing and

future2. Diagnostic audit of

dry port performanceTo use the experience of Gedebage and Cikarang Dry Ports to understand what needs to be done to support development of successful dry ports in Indonesia

Diagnostic audit of factors that currently inhibit use of the Gedebage and Cikarang dry ports and analysis of what can be done to remove obstacles to improved performance of these ports and identify lessons learned for future dry port development

• Fact finding problems and constraint in Gedebage and Cikarang

• Detailed recommendations for what can be done to improve situation at these facilities

• Criteria for the selection and development of future dry ports.

3. Assessment of potential intermodal terminal markets

(IMT) and locations

Support planning to develop container yard connected to railway to increase the

flexibility of freight rail

Asses both demand and supply conditions at previously identified potential IMT locations, including

working with PTKAI on potential for development in several stations. Identify the possibility of further development of those container yard

• Potential location • Potential market • Potential development as

“consolidation freight centre”• Operational and business scheme

4. Exploration of potential for Java-Sumatra ro-ro services

Need to develop alternatives in Java-Sumatera corridor to decrease road traffic load

Detailed survey on ro-ro Jakarta –Belawan. Inititalizing assesment to potential demand from Central/East Java – Sumatera corridor

• Potential demand/commoodity (Semarang/Surabaya – Sumatera)

• Lesson learned to Jakarta- Belawan

5. Development of Cikarang-Tanjung Perak service options

More promising (double track vs Pasoso). Support to development freight rail in Java

North Corridor

Assess size of potential market and key determinants of mode choice for this movement. The analysis could

also incorporate an assessment of the feasibility of higher priority for freight trains on the double tracked section of the northern route.

• Potential market Cikarang to East Indonesia

• Problems and constraint to

development (include accessibility to Tjg. Perak Port)

• Modal share existing and future

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Terima Kasih