Delay of ticket price hikes to cost Rp 120b: KAI

The government’s decision to postpone a planned increase of train ticket prices will cost state-owned railway company PT Kereta Api Indonesia (KAI) Rp 120 billion in potential revenue losses over the remainder of the year, the company says.

Transportation Minister Freddy Numberi postponed a planned ticket price increase of 8 to 75 percent by issuing a decree in September 2010 that annulled a decree issued in August that stipulated new tariffs.

The ministry had put off a fare increase for the third time this year by issuing a decree in June that postponed the increases to July. The latest plan to raise the tariffs was to go into effect on Oct 1.

“The ticket price increases are important to improve customer services,” company president director Ignasius Jonan told journalists at the KAI’s 65th anniversary in Bandung on Tuesday.

Jonan said the cancellation would affect the company’s short-term plans such as to install air conditioning in all economy class carriages and implement an environmentally friendly waste management system for its operations.