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Jakarta Post

Government gives railway operator 50-year concession for LRT

  • Farida Susanty

    The Jakarta Post

Jakarta   /   Tue, March 7, 2017   /  11:28 am
Government gives railway operator 50-year concession for LRT Workers construct a pole for the light rail transit (LRT) system in Jakarta. (Antara/M. Agung Rajasa)

The government has decided to give state railway operator Kereta Api Indonesia (KAI) a 50-year concession for the light rail transit (LRT) system in the new financing scheme, the company’s finance director has said.

“It has been decided like that. That is the scheme,” KAI finance director Didiek Hartantyo said over the phone on Monday.

He added that the government would also provide a subsidy for the operation of LRT for 12 years, which will be based on the deficit in the cash flow of the company, not the number of passengers. Fares for LRT trips are set to be Rp 12,000 (90 US cents).

(Read also: Railway operator needs capital injection to invest in LRT)

The government decided last week that KAI would act as the investor for the facilities and infrastructure of the Rp 27.5 trillion project. To enable this, Presidential Regulation No. 65/2016 must be revised, as it dictates that KAI is to be the sole investor.

KAI is to receive a Rp 9 trillion state capital injection (PMN), including Rp 2 trillion from the 2015 state budget. The funds will be used as equity to get a Rp 18.5 trillion loan from state-owned banks.

“For the normal pattern, infrastructure funding usually comes from the government, KAI will only invest in the facilities. But because we also have to invest in infrastructure, the burden is heavier so we require a subsidy,” he said. (bbn)