The Jakarta Post
Thousands of passengers on the trial run of Indonesia’s first MRT system enjoyed free trips on Tuesday, even as the regular fares for the operation scheduled to start on March 24 have yet to be resolved.
Last week Jakarta councilors debated how to keep the fares for the MRT and light rapid transit (LRT) affordable for people from all walks of life. For now, Jakarta will have to bear a hefty subsidy to keep the fares affordable, between Rp 8,500 (56 US cents) and Rp 12,500 for the MRT and Rp 5,000 to Rp 7,000 for the LRT.
The issue of fairness has arisen because the councilors assume many passengers will be non-Jakarta ID card holders. Some 3 million people commute every week day from Jakarta’s satellite cities into the capital. Many people living in Jakarta for years also hold non-Jakarta ID cards.
Councilors discussed splitting the hefty subsidy, estimated to amount to Rp 672.38 billion in public funding for the MRT and Rp 327 billion for the LRT per year.
We need to remember that the MRT was built with a spirit of transit-oriented development (TOD) in mind. This means the MRT will have to commercialize its assets, such as the stations and the trains, to earn some revenue.
In 2014, the MRT management invited several journalists, including The Jakarta Post, to visit Tokyo and Osaka to show what kind of business scheme they aspired to.
We saw that in Osaka, stations were adjacent to two 17-floor and 28-floor buildings, comprising hotels, department stores, offices, a cinema complex and fitness clubs. Major railway companies in Japan usually diversify their businesses into property, entertainment, hospitality and sports.
In 2015, then MRT Jakarta president director Dono Boestami said the MRT management would realize the TOD concept by forming a subsidiary to handle cooperation between MRT Jakarta and nearby property owners.
Dono said his company also planned properties within a 350-meter radius to ensure that the stations, neighboring buildings and other transportation modes were well-integrated.
“We will cooperate with the owners of the buildings to integrate our stations with their properties,” he said, adding that some of the building owners had signed a memorandum of understanding and had shown interest in having direct access to the stations.
Such a scheme will need cooperation with the private sector, especially developers, which have already begun to see public transit stations as sources of more revenue, not as a liabilities near their properties.
In fact, many developers, state-owned and private, have begun to develop properties near stations, examples include new properties by Sinar Mas Land near Cisauk Station in Tangerang, Banten, and planned properties near LRT stations, to be built by state-owned construction company PT Adhi Karya (ADHI). ADHI has even dubbed the concept “LRT City”.
Perhaps for the first year, MRT and LRT will still need hefty subsidies from either the Jakarta administration or the central government. But the managements of the MRT and LRT need to get the TOD wagon rolling soon to ease the burden the taxpayers will have to bear.