Sustainable Freight Transport Policy in Indonesia

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  • Paving the Way for Sustainable Freight Transport

    Qatar National Convention Centre / Auditorium 3

    Doha, 25 April 2012 - 15.0018.00

    Sustainable Freight Transport Policy in Indonesia

    H.E. Bambang SUSANTONO, Ph.D.

    Vice Minister for Transportation

    Republic of Indonesia

  • SUSTAINABLE FREIGHT TRANSPORT POLICY IN INDONESIA

    Presented at:

    Side Event: Paving the Way for Sustainable Freight Transport

    UNCTAD XIII Conference

    Doha, 25 April 2012

    Bambang Susantono, Ph.D.

    Vice Minister for Transportation

    Republic of Indonesia

  • 3

    Indonesia: How to connect a vast archipelago

    Indonesia has incorporated intercity transport in the MP3EI (Master Plan on Acceleration and Expansion of Indonesia Economic Development)

    The MP3EI consists of 3 main pillars: (1) development of Indonesia Economic Corridors; (2) strengthening domestic connectivity; (3) acceleration of reliable ICT development

    The estimated need of infrastructure investment for these 6 corridors reaches USD 210 billion.

    Indonesia is the worlds largest archipelago with over 17,000 islands. The area of its waters is about 80% of the total area of the country.

    Therefore, intercity transport in Indonesia must consider interisland sea transportation as well.

  • 4

    Growing Country, Growing Needs of (Freight) Transport

    Transport sector requires an investment of USD 90.4 billion, comprising USD 37,298 million for road infrastructure, USD 13,080 million for port infrastructure, USD 3,577 million for airport infrastructure, and USD 36,445 million for railway infrastructure. With a GDP per capita of USD 3,469 and growing middle class, it is estimated that the number of trips will grow quite significantly in the near future

    One of the most dominant factors in trip generation in a country is the economic growth. With a population of 238m (In 2015, Indonesia's Population is expected to be 250m) Indonesia is Southeast Asias fastest-growing major economy clocking growth at more than 6% in 2011. Citigroup estimates Indonesias GDP growth to reach 6.3 percent in 2012 and 6.5 percent in 2013good for third-best in the region.

    USD

    37,298

    million

    USD

    13,080

    million

    USD

    3,577

    million

    USD

    36,445

    million

  • A Glance at Indonesias Current Transport System

    There were 15.7 billion tons of freight and 6.9 billion of person trips traveling in 2011. Earlier in 2006, there were 9,4 billion tons of freight and 2,3 billion of person trips.

    All transport modes play a role in Indonesia's transport system and are generally complementary rather than competitive. Road transport is the predominant mode, accounting for about 70 percent of freight ton-km and 82 percent of passenger km.

    The dominant use of road transport results in congestion, frequent road damages and increase traffic accident. It becomes inefficient to use road transport especially for long distance trips

    9.4

    2.3

    15.7

    6.9

    Freight (billion tons) Person (billion trips)

    Trips Growth Comparison

    2006 201167%

    300%

    5

  • National CO2 Emissions and Oil Consumption

    In Indonesia, CO2 emission contributed by the transportation sector reaches 23% of the national total emission. The emission of land transportation comprises 89% of the transportation sectors emission. In fact, the transportation sector in Indonesia uses the biggest share of the oil consumption at 51%. It is triggered by the increasing number of fleets and the low price of petroleum directed for transportation use (due to subsidies by the government).

    Source: MoT 2011

    Indonesias Transport Related CO2

    Emissions Indonesias Oil Consumption

    6

  • 7

    Government Policy to Reduce Transport Burden on Roads

    While road has a lower cost function for short distances, its cost function climbs faster than rail and maritime cost functions. At a distance D1 (500-750 km), it becomes more profitable to use rail transport than road transport while from a distance D2 (near 1,500 km), maritime transport becomes more advantageous.

    The Government of Indonesia is introducing policies that aims to reduce the transport burden on roads. The burden is to be shifted and balanced by other modes of transport, i.e. railways and short-sea shipping

    Short-Sea Shipping

    Railway Development

  • 8

    Java Double Track Project

    Transport movement in Java is still dominated by road transport. To balance this, there is an urgent need to strengthen the railway transport, through the completion of Java Double Track project.

    263 km Java Double Track Project connects two most important cities in Indoesia, Jakarta & Surabaya. Jakarta is home to 21 million inhabitants, while Surabaya has 7 million of population.

    BANDUNG

    Jawa Barat

    JAKARTA

    SERANG

    SURABAYA

    SEMARANG

    DKI

    Banten

    Jawa TengahJawa Timur

    YOGYAKARTADIY

    Merak

    Bogor

    Sukabumi

    Cikampek

    PadalarangCirebon

    Banjar

    Kroya

    Tegal

    Purwokerto

    Pekalongan

    Solo

    Madiun Kertosono

    Blitar

    Malang

    Bangil

    Sidoarjo

    Bojonegoro

    Jember

    Banyuwangi

    Bojonegoro

    Gambringan

    Bojonegoro

    Gundih

    Prupuk

    Kutoarjo

    BANDUNG

    Jawa Barat

    JAKARTA

    SERANG

    SURABAYA

    SEMARANG

    DKI

    Banten

    Jawa TengahJawa Timur

    YOGYAKARTADIY

    Merak

    Bogor

    Sukabumi

    Cikampek

    PadalarangCirebon

    Banjar

    Kroya

    Tegal

    Purwokerto

    Pekalongan

    Solo

    Madiun Kertosono

    Blitar

    Malang

    Bangil

    Sidoarjo

    Bojonegoro

    Jember

    Banyuwangi

    Bojonegoro

    Gambringan

    Bojonegoro

    Gundih

    Prupuk

    Kutoarjo

    North Java Double Track

    South Java Double Track

    The double track will increase the frequency and capacity of railways by 200-300%

    Illustration on potential energy saving at the completion of double track:

    The frequency of existing railway container from Jakarta to Surabaya is 5 trips per day, carrying 160 TEUs per day.

    With the double track, the frequency can be tripled to 15 trips per day, carrying 500 TEUs per day.

    Therefore, fuel saving resulted from shifting the 340 TEUs from road to railway may reach 115 kiloliter per day and CO2 emission may be reduced by 350 ton CO2 per day.

    In one year, a significant amount of fuel will be saved and it also contributes considerably to CO2 emission reduction, at 42,000 kiloliter of fuel and 128,000 ton CO2 respectively.

  • 9

    Muara Wahau Bengalon Railway Development, East

    Kalimantan

    9

    It is the first private rail freight in Indonesia by Middle Easy Company (MEC) Coal.

    The length of the railway is approximately 130km, connecting aluminum and coal mines to a special purpose port.

    The estimated value of investment is USD 1.5 billion.

    This rail freight is the first train in Indonesia with 3 locomotives and 120 wagons with a length of approximately 2 km.

  • Bukit Asam Coal Railway Development

    10

  • Sei Mangke Railway Development

    Sei Mangkei Industrial Area is a CPO-based industrial area occupying a land of 2,003 ha.

    There is a palm kernel oil processing plant with a capacity of 400 tons per day

    To enhance its logistics, a 25-km railway plan connecting the industrial area to Kuala Tanjung

    Port is currently being developed.

    11

  • City Logistics

    12

    Rail-based city logistics in

    Jakarta are currently

    being developed in order

    to relieve traffic

    congestion caused by

    freight movements.

  • 13

    Marine Highways: Trans Maluku

    Trans-Maluku is an integrated transport network system combining road transport and ferry Ro-Ro service which connect islands through urban centers in those islands.

    The combination of road transport and ferry Ro-RO service is designed to shorten distance and travel time, as to increase freight capacity. The Trans-Maluku network will use ferries to connect the islands, functioning as movable bridges.

    The plans include building 1,015 km of

    roads and 40 ports, which will be served

    by 24 ships.

    In medium term, Trans-Maluku network will

    be developed to connect Maluku with its

    surrounding regions including North

    Maluku islands and Nusa Tenggara.

  • 14

    Acceleration of Transport Infrastructure Development

    MP3EI Transport Infrastructure

    No Infrastructure Investment Need (USD Million)

    Est. # of Projects

    1 Ports and Inland Waterways

    13,080 92

    2 Airports 3,577 14

    3 Railways 36,445 25

    Total 53,102 131

    Public

    Infrastructure

    Private Infrastructure

    (Private Purpose)

    Non -Cost Recovery Project

    Cost Recovery Project

    PPP

    SOE Special Asssignment

    State Budget Local Budget

    Tender / Right To Match Law 23/2007 on Railway Law 17/2008 on Shipping Law1/2009 on Aviation GR 67/05 GR 13/10 GR 56/11

    Presidential Regulation on SOE Special Assignment

    Special Airports Special Ports, Special Terminals Special Railways

    Licencing

  • 15

    Three Ways of Private Sectors Involvement in Transport

    Infrastructure Development

    Investments in Transport Sector

    Special Purpose Transport Infrastruct

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