T

he Transportation Ministry will increase fares for long-haul train services by 25 percent to more than double at the beginning of April to offset a decline in government subsides and surging operating costs, a ministry official has said.

Hanggoro Gunawan, the ministry'€™s director for rail transportation and traffic, said the new fares would be applied for air-conditioned, economy-class intercity and interprovincial train services.

Fares for economy class passengers plying the Madiun (East Java)-Tanjung Priok (Jakarta) route with Train will increase from Rp 55,000 to Rp 135,000. Meanwhile, fares for Surabaya-Jakarta Kota route with GBMS train will be raised from Rp 55,000 to Rp 110,000, and the Malang-Pasar Senen route will see an increase from Rp 65,000 to
Rp 115,000.

The tariff for the Siantar-Medan (North Sumatra) route with Siantar Express will also increase from Rp 20,000 to Rp 25,000, while the tariff from Tanjung Balai (Riau Islands)-Medan will increase to Rp 30,000 from Rp 20,000.

For the new commuter line distance-based fares, passengers must pay Rp 2,000 for the first 25 kilometers and an additional Rp 1,000 for every 10 km of travel. On the other hand, non-electronic tickets will cost a flat rate of Rp 3,000.

'€œWe'€™ve accommodated the aspirations of the land transportation directorate general and Organda [the Organization of Land Transportation Owners], asking us to keep the cheap pricing of trains from cannibalizing the sales of other [transportation] modes,'€ Hanggoro said.

'€œWe need to balance pricing among transportation methods,'€ he added.

To this effect, the ministry will reduce the public service obligation (PSO) allocation for intercity and interstate services and reallocate them to urban commuter line and routine services for schoolchildren and workers.

'€œWe won'€™t subsidize what we don'€™t need to. Medium and long-haul services aren'€™t a daily necessity; people have the means to prepare for them,'€ he concluded.

Hanggoro said that the price adjustment came as a result of several factors affecting the valuation of the ministry'€™s Rp 1.5 trillion (US$118.9 million) allocations in PSO, also called subsidies, for state-owned train operator PT KAI.

The PSO allocation for interprovincial services will be reduced from Rp 115 billion to Rp 110 billion, while intercity trains will receive Rp 127 billion in subsidies this year, or Rp 3 billion less than before, according to ministry data. Hanggoro said that the updated fares also took into account higher subsidized-fuel prices, the rupiah'€™s depreciation against the dollar and a 2-percent adjustment in calculating profit margins for the operational-cost scheme of economy-class train services.

Totok Suryono, executive vice president for passenger transportation marketing and sales at PT KAI, said that the new fare structure would allow the government more leeway with its PSO allocation for the train operator.

'€œIf we continue to use the old fare structure in Ministerial Regulation No. 5, the DIPA [authorized funds] from the state budget will only sufficiently cover long-haul train services until the end of June,'€ Totok told The Jakarta Post on Friday.

By implementing the adjusted train fares, Totok explained, the ministry would be able to cover the PSO contract in most cases until Dec. 31, extending the government'€™s train-fare subsidies by six months.

According to him, the new fares specified in Ministerial Regulation No. 17/2015 assume a new subsidized-fuel price of Rp 6,400 per liter and a rupiah-dollar exchange rate of Rp 12,850.