Sustaining mobility growth: It’s time for smart investments

Since 2007, the Indonesian Transportation Society has continually called on the Indonesian government to pay more attention to the growing demands in the transportation sector, and the provision of infrastructure and services to cater for those demands.

In particular, we expressed our concern regarding three vital, national transportation hubs, namely Soekarno-Hatta International airport, Tanjung Priok Port and Merak-Bakauheni ferry crossing. If no improvements are carried out, we shall see a major drawback in our transportation system. Why have we chosen these three major hubs to reveal our concern with the transportation sector?

These three resources offer a chance to understand the negatives and positives in both public and industry policies. We can learn from the need for swiftness in policy implementation to respond to the dynamics of Indonesia and Asia’s rapid, yet volatile, economic development.

Let us first talk about what happens on the demand side. This year we enjoyed a growth rate in the transportation sector well above the overall growth in the economy. An increasing urban population and middle class in Indonesia and, therefore, increasing consumption, as well as global demand for commodities are all contributing to the national economic and mobility growth.

Typically, across various modes, except rail passenger flow, we witnessed between 10 and 20 percent growth in the transportation sector compared with the figure in 2010. The lowest growth was in the land transportation passenger flow and the highest growth in the air transportation sector.

Domestic container transportation and vessel movements are also steadily increasing, thanks to the cabotage policy imposed by the Indonesian government. This policy creates a safe haven for national shipping companies serving domestic routes, and therefore provides an incentive for the industry to invest in shipbuilding. Growth in rail services has been suppressed due to the fact that only limited additional rolling stock has been supplied by PT KAI to serve the demand.

However, parallel with the growing demand for mobility among both passengers and goods, we are unfortunately experiencing greater inefficiency in our logistics costs, an increased number of accidents, and declining quality in our urban transportation systems. Our transportation costs have increased up to 20 percent in real terms for mining commodities. The number of accidents increased although the government claims that the number of fatalities is decreasing. The latter statement is arguable. The government’s internal dispute and media war over accident statistics during the Idul Fitri holiday season demonstrated that the credibility and reliability of national accident data are questionable.

The sharp decrease of public transportation use in Jakarta from 38 percent to 13 percent is certainly an alarming condition and reveals a decline in the quality of urban transportation. Since urban transportation determines the competitiveness of a city, and cities are often a reflection of the economic progress within a country, then the decline in the public transportation share not only shows the poor performance of our urban transportation system but also indicates the vulnerability of our future urban development system.

Surely, there are a number of reasons to explain the actual causes of inefficiency, accidents and uncompetitiveness in the urban area. However, if we can summarize them into a few words, then the problem is “a lack of investment”. Smart investment in the transportation sector should be the key policy for 2012 if we want to establish a robust foundation and sustainable growth in economic and social development.

After 2009, an increase in government spending for transportation infrastructure was apparent in the road and, more recently, railway sectors. Persistent, deeply rooted problems within the two sectors are the pressure for effective and timely disbursement, and high quality assets that need to be created. In other sectors, such as sea and air transportation, we have not seen the government allocating money to increase the capacity of seaports and airports.

While it is true that these ports are managed by state-owned companies like Pelindo and Angkasa Pura, their willingness to invest was hampered by past liabilities and bad debts, as well as the capacity of the government to act as a regulator after the new transportation laws were enacted. All sea — and airports in three major Indonesian
cities — Jakarta, Surabaya and Makassar — are now choked with traffic far exceeding their planned capacity, and are being forced to run on less-than-ideal, decreased safety operations. So far, the government only plans to add capacity to the seaport and airport in Jakarta.

The problem is, we do not have the luxury of investing in transportation projects one at a time. We are faced with an urgent need to expand our transportation infrastructure in all busy cities and hubs in Indonesia at the same time. We are in a hurry to catch up with the increasing demand for mobility!

And we need to cope with the increasing volume of traffic in a smart and intelligent way. We need to move from the less safe transportation mode of motorcycles to various forms of public transport, and we have to shift commodities carried by trucks to rail and sea. We have to ensure that an energy supply for transportation services is secured. We need to restructure our land use to reduce travel and encourage the use of mass transportation, and we ought to use information and communications technology (ICT) to reduce physical mobility and improve traffic flow on streets. With smart investment, we can have less public spending but achieve a higher number of journeys.

Private investment should be mobilized to compliment the public sector. The growing number of middle-income people can pave the way for a “fee-for-service” transportation infrastructure. With the new deal in the House of Representatives on the land acquisition law, people think that all the problems associated with land availability will immediately be solved. I do not think that will be the case.

Realistically, the land acquisition law will effectively be in place and implemented at least in three years’ time. What the government needs to do now is to empower its field team, work closely with their local government counterparts and effectively disclose information to the public.

The experience in the toll project suggests that the number of court cases is less than 5 percent, which means that 95 percent of land parcels acquired can actually be settled with the current system. It also means that well-planned negotiations and communication are the keys to success in the land acquisition deal. It is the information asymmetry that disturbs the market mechanism, not the regulation.

When it comes to urban transportation, Greater Jakarta and Depok will set a benchmark for the rest of the country’s urban areas. What we need to see in 2012 is the effective implementation of the Greater Jakarta and Depok Transportation Master Plan and the operation of the Greater Jakarta and Depok Transportation Authority.

At the moment, the Presidential Work Unit for Development Monitoring and Control (UKP4) is responsible for monitoring and enforcing the action plan for Greater Jakarta and Depok’s mobility management. We need new coordination and facilitation skills and capacity, and we need more fiscal support to implement all of the projects.

Increasing the frequency of Transjakarta to meet three to five minutes headway, supporting the smooth operation of a loop line and mass rapid transport (MRT) tender process, a massive investment in park-and-ride facilities and off-street parking facilities should be the priorities for next year.

I believe 2012 will be a very important year for our transportation sector. It will determine our success or otherwise in sustaining growing mobility demands in the future. It is the time to make a concerted effort to ensure that smart investments are made and capacities are expanded!

The writer is a professor of transportation at Gadjah Mada University. He is chairman/president of the Indonesian Transportation Society, the director of the East Asia Society for Transportation Studies, and a board member for the Indonesia Infrastructure Initiative.