The Indonesian government, through state-owned railway operator PT Kereta Api, imported 10 secondhand carriages last April, initiating a program to roll out a total of 90 Japanese-made carriages this year.
These 10 carriages, made in the 1980s, are equipped with air conditioning and can carry 140 passengers each. They will serve the Jakarta – Bogor and Jakarta – Serpong lines to meet increasing commuter demand in the Greater Jakarta (Jabodetabek) area.
Hopefully, additional trains on these busy lines will eliminate the number of passengers traveling on train carriage rooftops, exposing themselves to the risks of high-voltage electric shocks or being thrown from the train.
However, this decision has sparked controversy. Why did the government decide to buy secondhand carriages? Why didn’t they invest in new, higher quality facilities? Why spend money on property considered outdated in developed countries?
The answer lies in the Transportation Ministry’s limited budget for acquiring public transportation facilities. In 2010, the government allocated Rp 16 trillion (4.8 percent of the national budget) to the Transportation Ministry, more than 70 percent of which will be used to pay its employees. As a consequence, the amount left over to be used to purchase additional facilities is relatively small.
This is the dilemma. On the one hand, the government is required to provide the best facilities it can, while on the other, the budget is so small that it can’t always afford to acquire new facilities. The situation has forced the government to seek alternative solutions, including purchasing secondhand facilities from other countries. Of course, this decision has its pros and cons.
The opposition camp argues that purchasing secondhand products from other countries is imprudent because buying “scrap” will inevitably be more costly because of excessive maintenance costs incurred.
Critics say buying secondhand merchandise will only complicate the already-problematic Indonesian public transportation system. They cite old buses pumping out black smoke, overcrowded trains and the old and always overloaded ferries.
Meanwhile, the proponent camp states that purchasing secondhand facilities can be a beneficial and cost-effective alternative, as long as the items acquired are still of high quality. They argue that economic conservatism does not necessarily imply “cheap”.
The first reason the government continues to purchase secondhand facilities is that the cost is normally far lower than the expense of new items. As mentioned above, the actual allocation for refurbishing our transportation facilities is only 30 percent of the Transportation Ministry’s total annual budget. That is why the government considers the purchase of secondhand facilities from countries such as Japan, China, South Korea or the United States an affordable option.
For example, the 10 secondhand carriages recently imported from Japan cost Rp 1 billion per unit, including shipment, whereas one new compartment from PT. INKA in Madiun requires Rp 1.5-2 billion.
Obviously, the price of the secondhand carriages are more economical and more accommodating to the government’s limited budget.
On the other hand, critics say the decision shows the government’s reluctance to promote domestic industry by preferring to buy cheaper secondhand goods instead of investing in Indonesia’s industrial capacity. While most often the final cost of buying domestic is inevitably higher, at least the money never leaves Indonesia, they say.
The government has an answer to the prevailing cynicism. Buying secondhand facilities will spare the government the time required to research, assess, select, order and secure new merchandise. In fact, ordering, designing and manufacturing one commuter train (eight new compartments) takes more than one year to finish. If the government requires 300 new compartments to replace older units, how much time will be required to address that demand?
Whatever the reason, the government’s policy to buy secondhand facilities will only be effective if it employs the right mechanisms to do so. First of all, the purchased facilities should have internationally standardized certificates ensuring safety and compliance with the Euro II emission standards.
Second, the government should also provide legal standing to protect domestic industry. This means that purchasing of secondhand facilities should be accompanied by ambitions to compliment domestic production. For example, in the case of ferries, it is most often necessary to import the engines, while other components can be capably fabricated in Indonesia.
Third, to make sure the benefits outweigh problems, domestic maintenance capacity must be considered before purchasing secondhand facilities from abroad. When facilities malfunction or break, the operating authorities should have the knowledge and skills to restore and repair them. They should also be aware of problems often associated with the scarcity of spare parts.
Lastly, it is crucial for the government to accurately appraise the secondhand items’ expected life cycle so authorities understand when they should be removed from service to prevent accidents.
In all, the government is doing its best to provide the most important public facilities for its citizens.
More often than not, it has to deal with a problematic situation where it is expected to acquire all necessities, but budget constraints sometimes force it to purchase secondhand facilities. However, the safety and security of the citizens should be the main consideration before any purchase is made.
The writer is staff member at the Coordinating for Political, Legal and Security Affairs Minister’s Office. The opinions expressed are personal.
