State railway company PT Kereta Api Indonesia (KAI) expects to net between 10 and 15 percent growth in revenue next year, banking on higher tariffs for its economy class, says an executive.
The company has proposed a 50 percent tariff rise to be effective by July next year, in anticipation of the government rejecting its request of additional state funds to help finance its public service obligation (PSO) program, which requires it to provide cheap transportation to as many people as possible.
That would eventually boost the company’s revenue, KAI president director Ignasius Jonan said Monday at the State Ministry for State Enterprises.
“This year, our revenue is expected to reach Rp 6 trillion [about US$620 million], which was far higher than last year,” Ignasius told reporters.
In 2008, KAI recorded Rp 4.32 trillion in revenue.
Jonan said the company had so far booked Rp 200 billion in net profits.
“The net profits this year have exceeded our budget target,” he said, adding that in 2008 KAI suffered Rp 83 billion in losses.
This year’s revenue was dominated by passengers (70 percent) rather than goods (30 percent).
On the planned tariff increase, Ignasius said that it had already proposed the price rise to the government, which it proposed would be phased in gradually over two years, starting next July.
The planned tariff increase would come in handy if the government refused to meet the company’s request for an increased PSO budget.
KAI has proposed an additional budget for carrying out the PSO program to close the gap between ticket prices and operational costs, which has been increasing every year.
The company has proposed for the budget to reach Rp 670 billion next year, up from an initial budget proposal of Rp 535 billion. In 2008, the government provided Rp 710 billion for this purpose.
According to the Transportation Ministry, the total railway network in Indonesia stands at just over 6,000 kilometers.
