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View all search resultsSOEs, transportation ministries give nod to KCI to import trains
The SOEs minister is worried that a delay in procuring new rolling stock may result in fare hikes or leave passengers stranded due to capacity constraints.
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ommuter Line operator PT Kereta Commuter Indonesia (KCI) is facing a dilemma as it needs to retire 10 trains due to old age this year, and another 19 for the same reason next year.
Its plan to import used trains from Japan has been met with resistance from the Industry Ministry because of the local content requirement (TKDN).
The TKDN, under Presidential Instruction No. 2/2022, requires the central and regional governments to allocate at least 40 percent of their procurement budgets to domestically sourced goods and services, with a priority for micro, small and medium enterprises (MSMEs) and cooperatives.
The ministry has encouraged KCI to purchase trains from a local manufacturer, particularly PT Industry Kereta Api (INKA), however, there are concerns about the latter’s ability to produce the trains on time.
State-Owned Enterprises (SOEs) Minister Erick Thohir said that, if INKA did not have enough production capacity, there was no harm in KCI buying trains from abroad as a short-term solution.
KCI, which operates trains in the Greater Jakarta area, already has plans to purchase 16 additional trains from INKA to meet its goal of serving 2 million passengers daily. The two parties are set to finalize the Rp 4 trillion (US$262.3 million) contract later this month.
But the price is reportedly considerably higher than if the company were to import used Japanese trains, and INKA cannot complete production until 2025 or 2026.
Read also: Commuter Line passengers face service deterioration with plan to retire 10 trains
Therefore, the support of the SOEs minister was requested. "I'm sure that they [the trade and industry ministries] will support [KCI in this case]. It's only a communication problem," Erick said on Tuesday, as quoted by Kompas.com.
The Transportation Ministry has signaled its support for the import plan. “We need a temporary solution to address the surge in Commuter Line passengers until the trains produced by INKA are finished and ready for service,” the ministry’s spokeswoman, Adita Irawati, said in a press statement on Wednesday.
According to Erick, if there is a delay in train procurement, it would result in fare increases or service deterioration as KCI’s carrying capacity would be reduced.
Additional trains this year would also help the railway operator to improve its operational costs, as the number of passengers would also grow, he said.
Currently, KCI has 106 trains in operation capable of serving 1.2 million passengers in the Greater Jakarta area per day, with each train consisting of eight to 12 cars.
The railway operator asked permission from the Trade Ministry and Industry Ministry to import used trains from Japan in September last year. The ministries got back to the KCI in January and blocked the plan.
