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INDONESIA INFRASTRUCTURE INITIATIVEINFRASTRUCTURE NEWS ARTICLESWEEK ENDING 3 OCTOBER, 2014

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INDONESIA INFRASTRUCTURE INITIATIVE

An Australian Government Initiative

Infrastructure News Week Ending 3 October, 2014

TRANSPORT

1. COLLABORATION: DKI - PT KAI Clean up Train LinesKOMPAS, 2 October, 2014, Page 27, Section: Metropolitan, KERJA SAMA: DKI-PT KAI Tata Jalur KeretaProvincial Government of Special Capital Territory of Jakarta (DKI Jakarta) collaborates with PT Kereta ApiIndonesia (KAI) and Ministry of Transportation to revamp train station and train line areas. The areasalong the rail lines will be revamped and developed into residential settlements that are integrated withthe mass transport mode. PAGE 1

2. INTEGRATED TRANSPORTATION: Trans Jabodetabek Bus LaunchedKOMPAS, 2 October, 2014, Page 26, Section: Metropolitan, TRANSPORTASI TERINTEGRASI: Bus Trans Jabodetabek DiluncurkanThe Trans Jabodetabek bus, an integrated transport mode between Jakarta and its partner regions,namely Bogor, Depok, Bekasi, and Tangerang, was put into operation for the first time on Wednesday (1October). The operation was marked by the launch of 10 Trans Jabodetabek buses serving the Ciputat(South Tangerang) - Blok M (South Jakarta) route. PAGE 2

3. PU Spurs Road Projects in SulawesiInvestor Daily, 30 September, 2014, Page 6, Section: Infrastructure & Transportations, PU Genjot Proyek Jalandi Sulawesi

National Road Implementing Agency (BBPJN) VI of the Ministry of Public Works (PU) has targeted theconstruction of a number of roads in Sulawesi to be achieved within the next five years. PAGE 3

4. KERTAJATI AIRPORT PROJECT MOVES ON: Husein Sastranegara Airport Starts to beDeveloped

Investor Daily, 30 September, 2014, Page 6, Section: Infrastructure & Transportations, PROYEK BANDARAKERTAJATI JALAN TERUS: Bandara Husein Sastranegara Mulai DikembangkanPT Angkasa Pura (AP) II has conducted the pile erection (groundbreaking) of Husein SastranegaraAirports development project, Bandung, West Java (Jabar). The development project will increase theterminal's capacity to 3.4 million passengers per year, or much higher than the current capacity of only750,000 passengers. PAGE 4


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5. SUPPORTING ACCELERATION OF LOGISTICS INFRASTRUCTURE PROJECTS: Privately-Owned Port Business Entities Ready to Allocate US$ 6 Billion

Investor Daily, 1 October, 2014, Page 6, Section: Infrastructure & Transportations, DUKUNG PROYEKPERCEPATAN INFRASTRUKTUR LOGISTIK: Badan Usaha Pelabuhan Swasta Siap Gelontorkan US$ 6 MiliarA number of privately-owned port business entities (BUP) in Indonesia have expressed readiness to pour

investment funds worth US$ 6 billion to support accelerated projects for the development of portlogistics infrastructure during the term of the new government in order to reduce logistics costsnationwide. This private investment is certainly cheaper than the estimated funding requirement madeby the port operators of Pelindo and it can be realised more quickly than the present plan for the nextfive years. PAGE 7

6. RP 20 BILLION PER MONTH REQUIREMENT: AirNav Adds Navigation Managementof 168 Airports

Investor Daily, 2 October, 2014, Page 6, Section: Infrastructure & Transportations, BUTUH RP 20 MILIAR PERBULAN: AirNav Tambah Pengelolaan Navigasi 168 BandaraMinistry of Transportation (Kemenhub) has handed the operations of air navigation services at 168

airports managed by the Airport Management Office of Directorate General of Air Transport to theIndonesian Air Navigation Service Operator Agency (LPPNPI), or AirNav Indonesia. PAGE 8

7. TRANS-JAVA TOLL ROAD: Solo Kertosono Segment Threatened with TakeoverBisnis Indonesia, 29 September, 2014, Page 29, Section: Transportasi & Infrastruktur, TOL TRANS-JAWA: RuasSolo-Kertosono Terancam Diambil AlihThe government said that the management of the Solo - Ngawi and Ngawi - Kertosono toll road segmentsby PT Thiess Contractor is at risk of being taken over by another party because the company is suspectedto have financial problems. PAGE 10

8. PORT HOLDING COMPANY ESTABLISHMENT: Parliament Criticises Pelindo IIs Plan Bisnis Indonesia, 30 September, 2014, Page 25, Section: Transportasi & Infrastruktur, PEMBENTUKAN HOLDINGPELABUHAN: DPR Kritik Rencana Pelindo IIPeoples Representative Council (DPR) has criticised the proposal of PT Pelabuhan Indonesia II, which willmerge all port operators in Indonesia, because it is considered that the plan would not be effective inbalancing development and increasing the productivity of ports. PAGE 12

9. AIRPORT DEVELOPMENT: AP II Sets aside Rp 10 Trillion to Polish Nine LocationsBisnis Indonesia, 30 September, 2014, Page 24, Section: Transportasi & Infrastruktur, PENGEMBANGANBANDARA: AP II Siapkan Rp 10 Triliun Poles 9 TempatPT Angkasa Pura II is preparing an initial stage investment worth Rp 10 trillion to rejuvenate and developnine airports starting next year. PAGE 14

10. LONG- AND MEDIUM- DISTANCE, ECONOMY-CLASS TRAINS: Subsidy Withdrawn,Prices Jump

Bisnis Indonesia, 1 October, 2014, Page 24, Section: Transportasi & Infrastruktur, KA EKONOMI JARAK SEDANG- JAUH: Subsidi Dicabut, Harga MelonjakPT Kereta Api Indonesia will charge tariffs without subsidy and partial tariffs on long-distance andmedium-distance economy-class trains effective from 1 January 2015. The average new tariffs for nonpublic service obligation (PSO) trains will be Rp 90,000 - Rp 150,000. PAGE 17

11. TRANS-SUMATERA TOLL ROAD: Government Begins Construction of First TwoSegments

Bisnis Indonesia, 1 October, 2014, Page 25, Section: Transportasi & Infrastruktur, TOL TRANS-SUMATRA:Pemerintah Awali Pembangunan 2 Ruas Pertama


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TRANS-SUMATERA TOLL ROAD: Government Begins Construction of First Two SegmentsThe government will begin the construction of two out of the four priority trans-Sumatera toll roadsegments on 8 October 2014, namely Medan - Binjai and Palembang - Indralaya. PAGE 19

12. PORTS: Lino: Cilamaya Project Should Be Stopped

Bisnis Indonesia, 2 October, 2014, Page 29, Section: Transportasi & Infrastruktur, KEPELABUHANAN: Lino:Proyek Cilamaya Disetop SajaThe government's plan to develop the Port of Cilamaya has been assessed by the port service state-owned enterprise (BUMN) PT Pelindo II, instead, as something that does not need to be pursued further,following the construction completion of the Port of New Priok in Kalibaru, North Jakarta. PAGE 21

13. PORT SECTOR HOLDING COMPANY: Dahlan: Pelindo Merged in 2015Bisnis Indonesia, 3 October, 2014, Page 28, Section: Transportasi & Infrastruktur, PERUSAHAAN INDUKPELABUHAN: Dahlan: Pelindo Dilebur 2015State-Owned Enterprises (BUMN) Minister, Dahlan Iskan, has affirmed that PT Pelabuhan Indonesia I, II,III, and IV as well as related BUMNs should be merged into a single holding company next year in order to

accelerate the implementation of the sea tollways. PAGE 24

WATER AND SANITATION

14. Waste Management Facilities InadequateMedia Indonesia, 3 October, 2014, Page 14, Section: Humaniora, Fasilitas Pengelolaan Limbah MinimEnvironment Minister, Balthasar Kambuaya, said that the use of chemicals has continued to rise in linewith the scores of industrial activities that support economic growth. This can be seen from the increasein the number of permits for the management of hazardous and toxic waste (B3) issued by the Ministryof Environment (KLH). PAGE 26

OTHER

15. INFRASTRUCTURE: World Bank Readies Rp 6 Trillion to Assist Local GovernmentsKOMPAS, 2 October, 2014, Page 17, Section: Ekonomi, INFRASTRUKTUR: Bank Dunia Siapkan Rp 6 Triliun BantuPemdaThe World Bank has allocated an additional US$ 500 million, or equivalent to Rp 6 trillion, to improve theaccountability of infrastructure projects in the regions. The programme targets improvements of thefinancial statements, technical matters, and enhanced monitoring of public services sourced from thespecial allocation fund (DAK) and contributions from local governments. PAGE 27


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along the railway tracks. Residents affected by the clean-up measure will also be relocated to the high-rise apartments.

Basuki said that, based on a survey conducted by DKI Jakarta Provincial Government, nearly half of theresidents of the slum areas are tenants. "Those who make commotion (when disciplinary actions are

taken) are people who rent out the land. They protest that the measures are inadequately socialised orhave not been socialised at all. I do not want this kind of excuse anymore," he said.

He ordered the regional secretary to record and note each socialisation activity to the residents aroundthe rail tracks. Basuki also ordered the landscaping services department to immediately build gardensbelow the train overpasses, so that they will not be occupied by people again.

"We also hope that PT KAI increases the number of trains. Let the train passes every minute; it does notmatter if congestion occurs. I have also asked the transportation department to closed level crossings,"said Basuki.

He expressed hope that, once everything has become neat, PT KAI will also build new stations that areequipped with a park and ride facility, so that more people will ride the train and leave their personalvehicles behind.

DKI Jakarta Regional Secretary, Saefullah, said that, for the first step, the clean-up measures will becarried out around the BMW Park, North Jakarta. On the north side of the park there are still many illegalsettlements standing on the edges of the rail tracks.

Tanah Abang Subdistrict Head, Hidayatullah, said that clean-up measures at the edges of the rail trackswithin Tanah Abang territory will continue to be made. "The controlling measures will continue. We willcoordinate with PT KAI," he said.

Previously, controlling measures were taken at a location called Bongkaran, around Tanah Abang Station,which was made into a settlement. (FRO/ART)

2. INTEGRATED TRANSPORTATION: Trans Jabodetabek Bus Launched

KOMPAS, 2 October, 2014, Page 26, Section: Metropolitan Author not mentioned

SOUTH TANGERANG,KOMPAS- The Trans Jabodetabek bus, an integrated transport mode betweenJakarta and its partner regions, namely Bogor, Depok, Bekasi, and Tangerang, was put into operation for

the first time on Wednesday (1 October). The operation was marked by the launch of 10 TransJabodetabek buses serving the Ciputat (South Tangerang) - Blok M (South Jakarta) route.

After this route, Directorate General of Land Transport of the Ministry of Transportation will develop theTrans Jabodetabek routes from Depok, Tangerang, Bekasi, and Bogor.

Director General of Land Transport of the Ministry of Transportation, Suroyo Alimoeso, explained thatthe Trans Jabodetabek bus is similar to TransJakarta-integrated border transport (APTB) that has been inoperation in the last two years in the Greater Jakarta area. The difference is that the APTB is a transportmode serving the border areas, for example, between the city of Tangerang and Jakarta. In contrast,Trans Jabodetabek serves the entire Jabodetabek.


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"We try to manage mass transport into one system whose rules come from the national level.Meanwhile, APTB is managed by DKI Jakarta government and its partner regions," said Suroyo.

General Director of Perum PPD, Pande Putu Yasa, said that the Trans Jabodetabek bus is slightly different

from the APTB. The Trans Jabodetabek bus has a blue colour and it is equipped with two monitoringcameras and GPS to monitor the bus trip. A microphone is also available at the speedometer to facilitatethe drivers communication with passengers. In APTB bus, such devices are not available.

Chairman of the Supervisory Board of Perum PPD, Hasudungan Aritonang, said that so far during the trial,there could be seen locations of congestion at peak hours, during 06:00 - 08:00 hours, at Ciputat Market,UIN, Pondok Pinang, and the Pondok Pinang I bus sop of TransJakarta. Starting from 16:00 hours,congestions occurred in Blok M and Pertamina Hospital.

A week before the launch, the bus, with a capacity of 32 seats and 50 standing passengers, already servedpassengers, but it was still in the testing phase. After the operation, passengers who ride the Trans

Jabodetabek bus from Ciputat are required to pay Rp 7,000 per one-way trip.

Suroyo said that by the end of this year, in December, there will be an additional 70 buses given to PPD tohelp the operation, both Trans Jabodetabek, TransJakarta, and also APTB buses.

South Tangerang Mayor, Airin Rachmi Diany, welcomed the presence of the Trans Jabodetabek bus. Thepopulation density in her administrative region, which covers an area of 147.19km 2, reached 1.3 millionpeople per km 2.

Nearly 50 percent of the population of South Tangerang are working in Jakarta. Some of them work inBodetabek [Bogor, Depok, Tangerang, Bekasi]. According to Airin, the Trans Jabodetabek bus is expected

to be an alternative mode of transport for the community. (PIN)

3. PU Spurs Road Projects in Sulawesi

Investor Daily, 30 September, 2014, Page 6, Section: Infrastructure & Transportations Author not mentioned

JAKARTA - National Road Implementing Agency (BBPJN) VI of the Ministry of Public Works (PU) hastargeted the construction of a number of roads in Sulawesi to be achieved within the next five years.

"Central Sulawesi has an outlet of Pantolohan Port; this should be linked from the West Coast and the

East Coast through the western and eastern traffic routes," said Chief of BBPJN VI, Deded PermadiSjamsuddin, as quoted from the official website of the Ministry of Public Works on Monday (29September).

According to Deded, in Central Sulawesi (Sulteng) there is already the Palu - Parigi road corridor, namelythe existing road that has a stable soil structure. With that condition, he added, his office is faced withthe choice whether to improve the existing road or create a new route that has been approved by theProvincial Government (Pemprov) of Central Sulawesi, because there is the Palu Special Economic Zone(KEK) there.

"Its feasibility is still being studied, technically and financially. The Palu Ring [Road] is to support the Palu


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KEK. The Palu - Parigi Project is part of the MP3EI projects, if everything is feasible, it will be realised twoyears from now, that is 2016," he said.

Another strategic infrastructure in the province of Central Sulawesi is the planned development ofPantoloan Flyover in the Western route. The flyover construction plan is still being assessed through a

feasibility study, especially from the financial perspective. In the province of West Sulawesi, BBPJN VI willbuild a new road from Mamuju towards Mamasa - Makale - Toraja. In addition, Provincial Government ofWest Sulawesi has proposed the construction of a new arterial road that connects to the port.

"In the next five years, BBPJN VI is targeting the Mamuju - Mamasa road segment toward the border ofSouth Sulawesi to be operated," he said.

Deded also explained that Public Works will build an underpass from Makassar - Maros heading to theairport toll road, due to the increasing traffic demand, and the project should be completed in 2016.Meanwhile, road widening will be done from Makassar to Bone in mid-2015.

"Overall, some 90.69 percent of the 5,700km national roads under BBPJN VI has achieved a solidcondition status," he said.

Not only just road access, in mid-August, the government started the construction (groundbreaking) ofthe first phase of TransSulawesi Railway (KA) project of the Makassar - Pare Pare route along 145kmworth Rp 9.65 trillion. Construction of the first phase of the railway line, which is part of the Master Planfor the Acceleration and Expansion of Indonesian Economic Development (MP3EI), is a pioneering projectof the railway in eastern Indonesia.

Director General of Railways of the Ministry of Transportation (Kemenhub), Hermanto Dwiatmoko, saidthat the estimated construction cost of the Makassar - Parepare railway line of Rp 9.65 trillion has been

allocated, among others, for land acquisition, railway infrastructure, support facilities, and the provisionof facilities.

"In 2015, the government allocated Rp 261 billion of State Budget funds for the construction of a doubletrack railway line along 30km in Barru Regency, South Sulawesi. Meanwhile, this year, land acquisitionalong 30km is pursued in Barru Regency using funds from the local government budget (APBD) of SouthSulawesi Provincial Government," explained Hermanto recently. (tm)

4. KERTAJATI AIRPORT PROJECT MOVES ON: Husein SastranegaraAirport Starts to be Developed

Investor Daily, 30 September, 2014, Page 6, Section: Infrastructure & TransportationsBy Laila Ramdhini

JAKARTA - PT Angkasa Pura (AP) II has conducted the pile erection (groundbreaking) of HuseinSastranegara Airports development project, Bandung, West Java (Jabar). The development project willincrease the terminal's capacity to 3.4 million passengers per year, or much higher than the currentcapacity of only 750,000 passengers.

President Director of PT Angkasa Pura II, Tri S Sunoko, explained that the number of passengermovements at Husein Sastranegara Airport in 2013 had reached 2.46 million people, or approximately300 percent of the available capacity.


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"The spirit of this development is to make Husein Sastranegara Airport as an icon and pride of Bandung,in addition, of course, it is to maintain the level of service amid the rapid pace of growth in the number ofair passengers," Tri said in a statement on Monday (29 September).

When asked for confirmation by Investor Daily , Development Director of Angkasa Pura II, Salahuddin Rafi,estimated the development of the airport in Bandung would cost Rp 139 billion, with funds derived frominternal sources. The development project is targeted to take 12 months from groundbreaking, and it willinvolve renovation and expansion of the passenger terminal, from an existing area of 5,000m 2 to become17,000m 2.

"Hussein Airport will be developed to improve service, safety, and comfort of passengers. The terminalcapacity will also increase from 750 thousand passengers to 3.2 million passengers per year," he said.

He explained that the development of Husein Sastranegara Airport leads to the concept of modern yettraditional [airport character]. The design of the new terminal building is inspired by the traditional

architecture of the roof shapes of West Java traditional houses, i.e. Leuit and Julang Ngapak, as well asthe provinces traditional weapon, i.e. Kujang.

"The design will be modern futuristic, but with an interior that provides warmth from the freshness of theair in the City of Bandung," said Rafi.

Husein Sastranegara Airport will be made with shades of indigo blue, as produced by the Tarum plant.This plant is a natural producer of indigo blue colour, and was often used by the ancient Sundanesepeople to dye clothes.

"The development is on the existing airport but still adopts international standards. The development of

Hussein Airport is also being done to meet the demand in West Java. This is because the airport will stillbe the main airport in West Java, before Kertajati Airport is completed and becomes operational," saidRafi.

In addition, PT Angkasa Pura II is preparing quite a large commercial area in order to increase thecontribution of non-aeronautical revenues at Husein Sastranegara Airport. After its development, thecommercial area at Husein Sastranegara Airport will reach about 3,000m 2, much bigger than the existingarea of just 500m 2.

This year, international and domestic passenger movements at Husein Sastranegara Airport areestimated at 3.08 million passengers. Airlines that operate at the airport include AirAsia, Lion Air, Garuda

Indonesia, Citilink, Express Air, Silk Air, Wings Air, Susi Air, and Tiger Air. Husein Sastranegara Airport hasone runway measuring 2,500m x 45m, which can accommodate flights with aircraft of Boeing 737-800NG, Airbus A320 and Boeing 737-900 ER sizes.

"Through the development that will increase the capacity of the terminal, it is expected that the peoplein Bandung and surrounding areas will get optimal services at Husein Sastranegara Airport," said GM ofHusein Sastranegara Airport, Yayan Hendrayani.

Kertajati AirportMeanwhile, on the sidelines of the first excavation work for the expansion of Husein Sastranegara Airportterminal, State-Owned Enterprise (BUMN) Minister, Dahlan Iskan, said that West Java International


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Airport (Kertajati) in Majalengka should become a reality, because it will be the future of aviation servicesin West Java.

"Kertajati Airport must be realised and the [project] moves on, in view of its ongoing developmentprocess," said Dahlan.

He said that West Java should have an airport with sizable capacity and expansion potential, because it isquite difficult to expand Husein Sastranegara Airport in Bandung.

"Today (Monday, 29 September), we did the groundbreaking for Husein Airports terminal expansion toincrease its capacity to 3.5 million passengers. But in the future, there should be a new airport whosecapacity could be twice as big or more, and it is expected this will be in Kertajati," he explained.

On that occasion, he said, determination and hard work to convince [the relevant parties] of the largevalue infrastructure development are greatly needed.

"There needs to be determination and certainly a strong will to make it happen. When it is done,everything can be realised," said Dahlan.

With regard to that matter, he said, the construction of the toll road over the sea in Benoa, Bali, whichwas originally thought to be impossible, proved to be doable. And, it has now become a solution toresolve traffic problems in the area.

With regard to the possibility of the realisation of Kertajati Airport, which represents collaborationbetween West Java and PT Angkasa Pura II, Dahlan said that everything has been considered in terms ofservices and potentials.

"Later (the management) will be run by the company (Angkasa Pura II)," he said.

Meanwhile, West Java Governor, Ahmad Heryawan, said that Kertajati Airport development hascontinued to be pursued and presently its runway is already built.

The plan is for the airport in the eastern part of West Java to be built on an area of 1,600ha anddeveloped into an aerocity industrial zone, with a total area of 5,000ha.

According to Heryawan, West Java Provincial Government is committed to realise the internationalairport, whose process was already initiated in 2008. The airport in due course will be equipped with theCisumdawu toll road and an airport railway line.

"Kertajati Airport will be the answer to the growth of the aviation industry in West Java routes. WhenKertajati is already in operation, Husein Airport will be a special purpose airport," he said.

Meanwhile, Head of Transportation Department of West Java, Deddy Taufik, said that the runway ofKertajati Airport is already built and it is a matter of building the terminal[s] and other facilities.

"The runway is already built; a land area of 1,600ha is wide enough for an international airport.Moreover, the airport will subsequently be connected with an airport train line and the Cisumdawu tollroad," he explained.

Development of Husein Sastranegara Airport


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Expansion of passenger terminal area from 5,000m 2 to 17,000m 2 Passenger accommodation capacity rising from 750,000 people to 3.4 million people Until the end of 2013, the number of passenger movements reaches 2.46 million people or about 300

percent of available capacity Cost of development Rp 139 billion

Airport design concept: modern yet traditionalSource: PT Angkasa Pura II

5. SUPPORTING ACCELERATION OF LOGISTICS INFRASTRUCTUREPROJECTS: Privately-Owned Port Business Entities Ready toAllocate US$ 6 Billion

Investor Daily, 1 October, 2014, Page 6, Section: Infrastructure & Transportations Author not mentioned

JAKARTA - A number of privately-owned port business entities (BUP) in Indonesia have expressedreadiness to pour investment funds worth US$ 6 billion to support accelerated projects for thedevelopment of port logistics infrastructure during the term of the new government in order to reducelogistics costs nationwide. This private investment is certainly cheaper than the estimated fundingrequirement made by the port operators of Pelindo and it can be realised more quickly than the presentplan for the next five years.

"Even without a letter of guarantee from the government, [we will invest] as long as we are given achance to manage ports, which have been monopolised by Pelindo all this time," said Vice Chairman ofthe Standing Committee on Logistics Actors and Service Providers of Kadin Indonesia, Zaldi Masita, in awritten statement on Tuesday (30 September).

He explained that the maritime vision of the Joko Widodo - Jusuf Kalla Government, which will provideinvestment opportunities to the national private sector, has been greeted positively by the nationallogistics business actors.

"Implementation of the maritime vision can be a starting point to create maritime logistics services thatare efficient and effective, as well as highly competitive, by way of ending the domination of portoperatorship in Indonesia in the hands of BUMNs all this time," said Zaldi in a written statement receivedby Investor Daily , Tuesday (30 September).

Zaldi explained that a number of privately-owned port business entities are ready to provide investmentfunds for the port logistics infrastructure sector if the Joko Widodo - Jusuf Kalla Government trulypartners with the national private sector to develop strategic ports in the country. Currently, Ministry ofTransportation (Kemenhub) has established 25 strategic ports in Indonesia with 24 port units being fullycontrolled by port sector BUMNs, and the other port is controlled by the Batam Authority Government.

Meanwhile, in the Blueprint of the National Logistics System (Sislognas), the government has set two hubports, namely Bitung Port and Kuala Tanjung Port, as well as the planned development of Cilamaya Port,which is expected to be developed with the private sector in order to reduce the burden on the StateBudget (APBN).


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Shipping Law No. 17/2008 mandates arrangements in the field of port affairs, containing provisionsconcerning the abolition of monopoly in the operation of the ports, separation between the functions ofregulator and operator, as well as allowing proportional roles for local governments and the privatesector to play in the organisation of national ports.

Currently, the cost of logistics in Indonesia is still deemed very wasteful, reaching 24 percent of the grossdomestic product (GDP). The port sector is still listed as one of the causes of logistics inefficiency becauseof limited infrastructure, whilst, on the other hand, port tariffs and other charges have tended toincrease.

Zaldi expects the Government of Joko Widodo and Jusuf Kalla to no longer rely on APBN to developstrategic ports in Indonesia, but increase the involvement of national investors and local governments,instead. "Shipping Law already gives space to the private sector and local governments in theorganisation of ports, but this has yet to happen," he said.

According to him, the government can encourage the port sector BUMNs to pursue market penetration

overseas, especially in anticipation of the globalization of trade.

"The port sector BUMNs have the capacity to expand abroad in order to support the national exporttrade. The incoming government should be able to target the port sector BUMNs to seek overseasexpansion," he said. (lrd)

6. RP 20 BILLION PER MONTH REQUIREMENT: AirNav AddsNavigation Management of 168 Airports

Investor Daily, 2 October, 2014, Page 6, Section: Infrastructure & TransportationsBy Laila Ramdhini

JAKARTA - Ministry of Transportation (Kemenhub) has handed the operations of air navigation services at168 airports managed by the Airport Management Office of Directorate General of Air Transport to theIndonesian Air Navigation Service Operator Agency (LPPNPI), or AirNav Indonesia.

Acting (Plt) Director General of Air Transport of the Ministry of Transportation, Santoso Eddy Wibowo,said that the handing of navigation management from the government to the red-plated [state-owned]company is part of the implementation of Law No. 1/2009 on Aviation and Government Regulation No.77/2012 on Perum [Public Company] LPPNPI.

"The transfer of units related to the provision of air navigation services in airports under UPT [TechnicalImplementation Unit] and UPBU [Public Airport Implementation Unit] will take place no later than twoyears after the establishment of the perum," he said in Jakarta, Wednesday (1 October).

This transfer involves technical and operational components, assets and finance of air navigation, as wellas human resources. Therefore, he continued, his office has appealed to LPPNPI to always ensure thesmooth operation of air navigation services in accordance with legislation. "This is to be achieved byensuring the operational continuity of air navigation services, assistance with data provision, and takingcare of assets," he said.

In the same place, President Director of LPPNPI, Icwanul Idrus, said that the company needs additionaloperational funds of Rp 20 billion per month for the management of navigation in the 168 airports


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belonging to the Technical Implementation Unit of the Ministry of Transportation. The BUMN will beginmanaging navigation services, among others at Hang Nadim Airport in Batam (owned by Kemenhub), aswell as Siborongborong Airport, Silangit Airport, and North Tapanuli Airport, belonging to PT AngkasaPura II.

Icwanul said that the merging of navigation operatorship at the airports belonging to PT Angkasa Pura(AP) I and II, as well as the UPT of Kemenhub, is mandatory according to Law (UU) No 1/2009 on Aviation,even though his company has to seek additional operational funds of Rp 20 billion per month .

The law stipulates that air navigation management be performed by an independent business entity,outside both the airport operators, both Kemenhub and AP I and AP II. "Like it or not, we have to transferrevenues from busy airports to be allocated as subsidies for the UPT airports," he said.

Besides, he added, in transferring the management of these services, inventory and verification still needto be done together between Directorate General of Air Transport and LPPNPI pertaining to the transferof assets, human resources, and finance. This, he said, is an effort to anticipate the occurrence of any

operational gap in services, personnel administration and financial management at the 168 airports.

In the minutes of the handover event, it is also noted that a periodic, three-monthly reporting in 2015 willbe done to evaluate the process of operational transfer of air navigation services at the airports. "This isdone to ensure the smooth running of services, so that the level of safety and regularity of aviation canbe maintained and improved," he said.

Domestic Passengers Up 26.82 PercentMeanwhile, the number of air passengers in domestic routes during August 2014 was 5.7 million people,or rising 26.82 percent compared to July 2014. The number of international air passengers in August wasrecorded at 1.1 million people, up 1.97 percent from the previous month.

Head of the Central Statistics Agency (BPS), Suryamin, said that the rising number of air passengers inAugust 2014 occurred as a result of the reverse flow of Lebaran [Eid] traffic.

"In August 2014, there was a reverse flow of mudik [home-coming] traffic after Lebaran. Here, it is clearlyillustrated; in July there was not any visible increase in the number of passengers, even the numbertemporarily declined, and now (August) all rose up," said Suryamin in a press conference yesterday.

In July 2014, a decrease in the number of transport mode users, especially air transport, was in line withthe decrease in the number of foreign tourists. In July 2014, BPS recorded a decline in foreign touristarrivals, which only reached 777.2 thousand people. The decrease coincided with the month of Ramadan.

However, tourist arrivals went back up again in August 2014, with 826.8 thousand visits.

"However, the increase in the number of passengers, particularly air passengers, did not only occurbecause of the rising number of foreign tourists, but also there were domestic travellers, business trips,and other things," he said.

Meanwhile, the cumulative number of air passengers from January to August 2014 was recorded at 47.5million, up 5.82 percent from the actual number in 2013. The details are as follows: the cumulativenumber of domestic passengers until August 2014 reached 38.5 million people, up 6.02 percent, and thenumber of international passengers reached nine million people, up 4.95 percent compared to the sameperiod in 2013 (m01)


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7. TRANS-JAVA TOLL ROAD: Solo - Kertosono Segment Threatenedwith Takeover

Bisnis Indonesia, 29 September, 2014, Page 29, Section: Transportasi & Infrastruktur

By Fitri Sartina Dewi [email protected]

JAKARTA - The government said that the management of the Solo - Ngawi and Ngawi - Kertosono tollroad segments by PT Thiess Contractor is at risk of being taken over by another party because thecompany is suspected to have financial problems.

PT Thiess Contractor is a toll road business entity (BUJT) and at the same time a majority shareholder inthe two toll road segments of Solo - Ngawi and Ngawi - Kertosono (Solo - Kertosono).

The company is known to have handed over the management of the Solo - Ngawi segment to PT Solo

Ngawi Jaya (SNJ), while the Ngawi - Kertosono segment has been handed over to PT Ngawi KertosonoJaya.

Director General of Highways (Bina Marga) of the Ministry of Public Works, Djoko Murjanto, said thatthere have been indications of a change or takeover happening to the two toll road segments that areparts of the Trans-Java.

This is because, he said, PT Thiess Contractor, as the BUJT, is deemed to lack sufficient funds to carry outthe construction. "It looks like there will be a replacement, as there have been indications that they havedifficulties in terms of funding," he said on Sunday (28 September).

Until now, he said, the construction progress of Solo - Ngawi toll road segment has not been significant,i.e. at around four percent, whereas the amount of land that has been acquired has reached 90 percent.

Djoko revealed that a number of companies have expressed interest to take over the physicalconstruction of the two toll road segments.

However, he declined to mention the names of companies that have expressed interest to take over."There are some, but this is not yet certain, right? So, we cannot mention the names [of the companies]yet," he said.

When asked for confirmation, Communications Specialist of PT Thiess Contractor, Imam Ghazali, said thathis company is still committed to continuing the physical development of the Solo Ngawi and Ngawi -Kertosono toll road segments.

He instead denied the allegations about funding difficulties and any plans of a takeover by anothercompany. "That matter [i.e. lack of funding] is not true. The fact is that activities on the field havecontinued to take place," he said.

Presently, he continued, construction progress on Solo - Ngawi segment has reached four percent, withland filling work reaching 10km, and also there is installation of reinforced concrete pipes (RCP), erectionof piles, culverts, and permanent fencing.

NOT YET STARTED


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Meanwhile, for the Ngawi - Kertosono segment, this BUJT has not yet started the construction processbecause the land acquisition process is still at 65 percent.

Based on his explanation, to fund the construction of two toll road segments, PT Thiess Contractor hasreceived a loan from Leighton Finance. However, Imam was reluctant to mention the amount of loan

proposed by his company.

Djoko Murjanto said that the government will start the construction of the Nganjuk - Kertosono sectionthat represents the governments portion [of responsibility] in the Solo - Kertosono toll road project.

"We will begin works on the 25km-long Nganjuk - Kertosono section of the Solo - Kertosono toll roadconstruction project, which is the portion of government support at the beginning of next year," he said.

He explained that the government has an obligation to build two sections of the toll road. The twosections are the Solo - Ngawi section along 15km and the Nganjuk - Kertosono section along 25km.

"The governments portion, with these sections, has a total length of 40km; the 15km section of Solo -Ngawi is already underway, and now the Nganjuk - Kertosono section along 25km will soon start[construction]," he said.

He said that the governments provision of support in the form of physical construction is based on theassessment that the toll road segment is less than viable economically. Currently, he added, theconstruction process of Nganjuk - Kertosono section has entered the contractor tender process.

However, to carry out the physical construction of the Nganjuk - Kertosono section, until now, thegovernment is still waiting for the disbursement of a loan from China worth US$ 360 million.

"The contractor tender has begun, so we expect a down payment of 15 percent - 20 percent of the totalloan from China to be disbursed soon by December 2014, so that the construction process can begin inJanuary next year," he explained.

For the physical construction at the 15km-long Solo - Ngawi section, Djoko explained that his party hasalmost completed the construction process, with its progress to date already reaching 90 percent. In thenext year, the work on this section is targeted to be completed.

"We are optimistic we can finish the two sections as soon as possible. After they are completed, we canpursue Thiess Contractor to immediately finish the construction of their parts," he said.

Profile of Two Segments of Solo - Kertosono Toll Road1. Segment of Solo - NgawiBUJT : PT Solo Ngawi Jaya (SNJ)Length : 90 kmNumber of Sections : 4Investment : Rp 5.14 trillionLand Cost : Rp 995 billionOperational Target : 2016Land Progress : 90.5 %Construction Progress : 4 %

2. Segment of Ngawi - Kertosono


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BUJT : PT Ngawi Kertosono Jaya (NKJ)Length : 87 kmNumber of Sections : 4Investment : Rp 3.83 trillionLand Cost : Rp 864 billion

Operational Target : 2016

Source: Ministry of PU, from various sources, processedBISNIS/HUSIN PARAPAT

8. PORT HOLDING COMPANY ESTABLISHMENT: Parliament CriticisesPelindo IIs Plan

Bisnis Indonesia, 30 September, 2014, Page 25, Section: Transportasi & InfrastrukturBy Muhammad Hilman

[email protected]

JAKARTA -Peoples Representative Council (DPR) has criticised the proposal of PT Pelabuhan Indonesia II,which will merge all port operators in Indonesia, because it is considered that the plan would not beeffective in balancing development and increasing the productivity of ports.

A company like Pelindo, which focuses on infrastructure development, is feared to only favour thedevelopment of certain ports. Meanwhile, greatly needed development plans for other ports will beinhibited, instead, because of the ego of the port operator.

Commission VI Chairman of DPR, Airlangga Hartanto, said that what Pelindo II meant about giving

favourable attention would happen in the development of Tanjung Priok Port alone. In fact, along with it,the government is preparing the construction of Cilamaya Port, which is considered very urgent to bebuilt.

If a model of mutual constriction is adopted for infrastructure development, it is considered an adverseimpact on economic growth, and it may even clog it.

"Cilamaya [could] be inhibited although it is much needed by industry. Pelindo, through the Ministry ofTransportation, has put in a condition that Cilamaya could be built if the expansion of Tanjung Priok hasalready reached a breakeven point (BEP)," he said on Monday (29 September).

On the other hand, port operators have different performances. Airlangga took the example of PelindoIII, which has been able to accelerate the development and expansion of port infrastructure withoutencountering any significant problems, whereas Pelindo II is still facing a lot of internal struggles.

"For [the development of] infrastructure, [as what is proposed] Pelindo is not effective to be made aholding [i.e. parent company]. Later, there will be favouring of certain ports," he said.

In a discussion on the National Logistics System Coming to MEA 2014, Impact and Opportunities, whichwas organised by Bisnis Indonesia and PT Pelindo II, Thursday (25 September), Director of Pelindo II,Richard Joost Lino, said that port operators in Indonesia need to be merged into a single holding companyin order to increase logistics efficiency.


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The merger was assessed to make all of the ports to have the same minimum service standards. The portoperators also need to get an investment injection of US$ 6 billion for revamping the ports so that theycan accommodate large ships.

GOOD ENOUGH

Director of the National Maritime Institute (Namarin), Siswanto Rusdi, said that the discourse on themerger of port operator BUMNs [state-owned enterprises] is good enough to improve the balance ofdevelopment among ports.

In addition, the consolidation will also provide common work patterns among the ports. For example, thework style of Pelindo IIs President Director, R.J. Lino, all this time has been considered fast and full ofbreakthrough initiatives, and this will impact on other Pelindo companies that are still slow.

However, he added, the merger should be made into two port operator companies, namely the portoperator for the western region and the port operator for the eastern region. In due course, eachoperator establishes new subsidiary companies to take care of each port.

By doing so, the potential vulnerability to losing control from the parent company, due to the largenumber of ports under the management, can be minimised. "If all are merged into a single holdingcompany it will not be effective because the CEO may also not be able [to handle] operational matters.So, the better option is to divide the holding between the west and the east. "

The formation of two parent port operator companies will also make the respective operators increaseproduction and operational effectiveness at the ports because of business competition. "There has to becompetition," said Siswanto.

Head of Public Relations of Pelindo III, Edi Priyanto, said that the suggestion of Pelindo IIs President

Director should get a comprehensive scientific study, both in terms of business theory andimplementation on the field.

So far, he said, all the boards of directors of Pelindo I, II, III and IV also have been working together in theconcept of the Pendulum Nusantara [Pendulum of the Archipelago]. In the framework of thiscooperation, a subsidiary company has been established, i.e. PT Terminal Petikemas Indonesia (TPI).

Three Fundamental Measures to Reform National Logistics System1. Infrastructure

Development of industrial area Short sea shipping programme

Trans-Java Toll Road Pushing for improvement of an addition to road networks throughout Indonesia Logistics study result - national logistics cost Development of logistics centres Availability of facilities for air cargo Accelerated development of Tanjung Priok area Adoption of national logistics system in the regions Development of aerocities/aerotropolis

2. Fiscal Policy Resolution of tax issues for freight forwarding


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Revitalisation of land transport modes that support logistics Revitalisation of sea vessels Change of export terms of trade into CIF Adoption of national single window

3. Regulation Planned revision of KM 10/1998 on Transport Arrangement Services Encouraging improvements in the performance of Customs and Excise Adoption of e-payment for customs clearance processes Streamlining and expedition of export and import procedures Eliminating the sectoral ego of stakeholders Law on Logistics and Transportation

Source: Association of Indonesian Logistics and Forwarders (ALFI), processedBISNIS/TUTUN PURNAMA

9. AIRPORT DEVELOPMENT: AP II Sets aside Rp 10 Trillion to PolishNine Locations

Bisnis Indonesia, 30 September, 2014, Page 24, Section: Transportasi & [email protected]

BANDUNG - PT Angkasa Pura II is preparing an initial stage investment worth Rp 10 trillion to rejuvenateand develop nine airports starting next year.

President Director of PT Angkasa Pura II (Persero), Tri S. Sunoko, said that the development of these

airports is al ready in the companys plans for 2014 and 2015. It is recorded that there are a number ofairports to be developed, including Sultan Thaha Airport in Jambi, Raja Haji Fisabililliah Airport in TanjungPinang, and Dipati Amir Airport in Pangkal Pinang.

In addition, there are Supadio Airport in Pontianak, Silangit Airport in North Sumatera, KualanamuAirport, as well as Husein Sastranegara Airport of Bandung. "Approximately there are nine airports thatwill be further developed," he said after a groundbreaking event for the development of HuseinSastranegara Airport terminal on Monday (29 September).

Kualanamu Airport, Medan, although it has just become operational, is also planned to be furtherdeveloped, especially for its runway and terminal[s].

Currently, the airport's capacity is still around 16 million passengers per year and it will be pushed up toreach 25 million passengers per year by 2020 "At the moment, Kualanamu is still being designed," hesaid.

Just for the development of these airports in 2014, he said, AP II must set aside Rp 8.7 trillion. Althoughthe funds will not be fully utilised, his company has already calculated the requirement for 2015 worth Rp10 trillion that has to be prepared. "Indeed, we are still struggling, but the Minister [of BUMN] has askedfor the development to take place. We are now looking for the funds," he said.

AP II itself requires a total investment of Rp 32 trillion to develop airports in accordance with the


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company's programme by 2030 According to Tri, the investment amounts or the airport developmentvary [from airport to airport].

He pointed out that the development of Husein Sastranegara Airport costs Rp 139 billion. "The target isto have it completed within 12 months, covering renovation and expansion of the passenger [terminal(s)]

from 5,000m2

to 17,000m2

," he said.

According to him, the development of Husein Sastranegara Airport is very urgent because the number ofpassengers it has to accommodate will continue to rise to 3.4 million people per year.

Currently, the capacity of the terminal in Hussein could only serve 750,000 passengers per year."Meanwhile, the [passenger] movements in Hussein in 2013 already reached 2.46 million [passengers] or300 percent of the capacity," he said.

HOLDING A TENDERIn addition to the expansion of Husein Airport, his company in the near future will prepare a tender for

the construction of Silangit Airport in Toba, North Sumatera. He admitted his company is still struggling toresolve the issue of land acquisition in the airport adjacent that is close to the tourism location of LakeToba.

According to him, the land acquisition is being done very carefully because the location pertains tocommunity ownership. "If the land acquisition is already done, we will be ready to hold a tender," hesaid.

According to him, the development of Silangit is targeted to start in 2015, soon after completion of theland acquisition matters. AP II claimed it will have the flexibility to build once the acquired land officiallyfalls under the companys authority.

BUMN Minister, Dahlan Iskan, said that going forward the government will rely on state-ownedenterprises to build infrastructure, rather than looking for funding sources from the State Budget (APBN).

Dahlan has asked AP II to fund the development of those airports using its own funds, but this is alreadybeyond the capability limits of the company. "But all these should be built. Money can be sought later,"he said.

Development of a number of airports under the coordination of both AP I and AP II, Dahlan said, must beimmediately addressed. He pointed to [the airport conditions in] Bandung, Banjarmasin, Semarang,Yogyakarta and Bintan, which are still considered embarrassing in the international eye.

"Bandung will be resolved within this year. Banjarmasin, Semarang; they will also achieve groundbreakingin two weeks," said Minister Dahlan.

Development of a number of airports [has been pursued] on average because their capacity is no longersufficient, such as terminals that could not accommodate the surge in the number of passengers andthere are long lines at check-in counters.

Silangit Airport is a priority of BUMN Ministry because currently tourist flows to the area are still not ableto access the air transport mode.

In addition, there is Kulonprogro Airport, which will replace Adi Sutjipto Airport, but the execution of the


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project still cannot be done in 2014. "However, all the airports that have embarrassed us all will bedone," said Dahlan. (k57)

Seven Airports under AP II Still Make LossesBANDUNG - Ministry of State-Owned Enterprises has asked Angkasa Pura II to offset its rejuvenation plan

for a number of airports by reducing losses in a number of places that they manage.

BUMN Minister, Dahlan Iskan, said that, of the 13 airports under AP II, there are seven that are still losingmoney. He noted that losses occur in Sultan Thaha Airport in Jambi, Kualanamu Airport in Medan,Pangkal Pinang, Raja Haji Fisabilillah in Tanjung Pinang, Sultan Mahmud Badarudin II in Palembang andMinangkabau in Padang. "Padang and Jambi have made losses due to depreciation," he said on Monday(29 September).

According to him, the losses at the two airports are not due to the factor of inadequate operations, butthey have occurred because of the very large costs of airport construction, loan interest and assetsdepreciation.

Dahlan believes that the losses at the two airports can slowly be eliminated in line with the end of therupiahs exchange rate depreciation. "I do not remember the loss figures," he said.

Although the majority of the airports are still losing money, Dahlan still asked AP II to continue pushingfor the development of a number of airports, both old and new.

He admitted that AP II needs substantial funds to build airports, but the commitment to making airportinfrastructure in Indonesia credible has pushed him to ask AP II to keep moving. "I do not want to know;money can be found," he said.

Minister Dahlan claimed that, in addition to encouraging AP II, he has also asked AP I to revamp a numberof airports in order to provide good services. (k1)

Several Airport Development Projects under Angkasa Pura IIName of Airport LocationSultan Thaha JambiRaja Haji Raja Fisabilillah Tanjung PinangDipati Amir Pangkal PinangSupadio PontianakSilangit Siborong-borongKualanamu Medan

Husein Sastranegara Bandung

Existing and Post-Development Capacity of Husein Sastranegara Airport of BandungItem Existing Post-DevelopmentTerminal Area (m 2) 5,000 17,000Capacity (Million Passengers) 0.8 3.4Curbside (m 2) 341 2,296Check in area (m 2) 371 1,533Commercial Area (m 2) 469 3,746Baggage Claim Area (m 2) 104 1,087Arrival Hall Area (m 2) 632 2,553


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Departure Hall Area (m 2) 746 3,109Toilet (m 2) 150 975

Source: PT Angkasa Pura II (Persero), processedBISNIS/RADITYO EKO

10. LONG- AND MEDIUM- DISTANCE, ECONOMY-CLASS TRAINS:Subsidy Withdrawn, Prices Jump

Bisnis Indonesia, 1 October, 2014, Page 24, Section: Transportasi & InfrastrukturBy Fitri Rachmawati & M.G. Noviarizal [email protected]

JAKARTA - PT Kereta Api Indonesia will charge tariffs without subsidy and partial tariffs on long-distanceand medium-distance economy-class trains effective from 1 January 2015. The average new tariffs fornon public service obligation (PSO) trains will be Rp 90,000 - Rp 150,000.

Vice President Head of Corporate Communication of PT Kereta Api Indonesia (Persero), MakmurSyaheran, that the imposition of commercial tariffs, or tariffs without subsidy, for the economy-classtrains has resulted from the governments policy to divert public service obligation (PSO) [funds] foreconomy-class trains to local trains within the Jabodetabek [Jakarta, Bogor, Depok, Tangerang Bekasi]area and commuter trains.

"Actually. The [new] tariffs were once applied in the first quarter of 2014," he said, Tuesday (30September).

The setting of the new tariffs without subsidy, he said, will not discourage people who use long-distance

and medium-distance, economy-class trains because the service standards for these trains will be better.

Meanwhile, the tariffs to be made effective by PT KAI itself vary, or depending on the distance andoccupancy, as well as the public interest. For example, the Progo I Train with the relation [i.e. route]/destination of Lempuyangan - Pasar Senen [presently] has a subsidized fare of Rp 50,000, but once thesubsidy is removed, he ticket price will be Rp 105,000 per person.

However, if the relations of the long-distance and medium-distance, economy-class trains are less desiredby the people, the government will still give PSO or subsidy.

According to Makmur, the provision of PSO will be more effective when distributed to users of local trains

as well as commuter trains, since most users of the Commuter Trains are workers or commuters with thehighest number of trip frequency.

"PSO will be prioritised for local and commuter trains because of the higher trip frequency of the peoplewho use the local trains and commuter trains than the economy-class trains," he said.

Commercial Director of PT KAI, Bambang Eko Martono, said that the governments policy to divert PSO tothe local economy-class trains and commuter trains is meant to make the subsidy better targeted tousers of railway services.

The policy has also been based on the results of evaluation by Directorate General of Railways of theMinistry of Transportation, who has been continuing to evaluate the provision of subsidy for the long-


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distance and medium-distance economy-class trains.

"The number of long-distance and medium-distance economy-class train passengers has continued toincrease, but even a more pronounced increase has been recorded on the commuter trains," he said.

SINCE 2 OCTOBERFor information, PT KAI since 2 October 2014 has imposed new tariffs without subsidy for long-distanceand medium-distance economy-class train trips from 1 January 2015.

With the diversion of the subsidy, said Bambang, it is certain that the rupiah amount payable by thepassengers when booking a ticket will be larger than the PSO-supported train fares. Meanwhile, theincrease in tariffs varies because it depends on the route of each train.

"The magnitude [of tariff] varies. For example the Kertajaya Train (KA) with Surabaya - Tanjung Priokroute, which originally has a fare of Rp 55,000 payable by the passenger will charge Rp 95,000 - Rp150,000 to the passenger after the diversion of PSO," he said.

Currently, the number of long-distance and medium-distance train passengers based on the 2013 datareaches about 500,000 people and it is believed it will continue to increase until the end of the year.Meanwhile, there are currently 655,000 passengers of commuter and local trains each day.

By looking at the number, he said, the diversion of PSO funds from the long-distance and medium-distance trains to the local and commuter trains manifests the right step because the diversion is madefor passengers who have a greater need.

Previously, Head of Legal and Public Relations Division of Directorate General of Railways of the Ministryof Transportation, Joyce Hutajulu, said that the transfer of subsidy could lead to an increase in the

frequency of local and commuter trains or decrease in the tariffs of those trains.

According to him, there are about Rp 800 billion of PSO funds for long-distance and medium-distancetrains that will be diverted to the commuter and local trains. It has been noted there are 22 long-distancetrain units and 24 medium-distance train units that will experience a change of tariff payable by thepassenger.

Adjusted Tariffs of 20 Long-Distance and Medium-Distance Trainsin Java and Sumatera per 1 January 2015(Rp per passenger)

1. Logawa Train: from Rp 50,000 to Rp 115,0002. Kertajaya Train: from Rp 50,000 to Rp 135,0003. Brantas Train: from Rp 55,000 to Rp 135,0004. Kahuripan Train: from Rp 50,000 to Rp 125,0005. Kutojaya Utara Train: from Rp 40,000 to Rp 90,0006. Bengawan Train: from Rp 50,000 to Rp 110,0007. Progo Train: from Rp 50,000 to Rp 100,0008. Pasundan Train: from Rp 55,000 to Rp 130,0009. Sritanjung Train: from Rp 50,000 to Rp 110,00010. GBMS Train: from Rp 55,000 to Rp 140,00011. Matarmaja Train: from Rp 65,000 to Rp 150,00012. Tawangjaya Train: from Rp 45,000 to Rp 95,000


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13. Serayu Train: from Rp 35,000 to Rp 95,00014. Kutojaya Selatan Train: from Rp 35,000 to Rp 70,00015. Tegal Arum Train: from Rp 25,000 to Rp 55,00016. Tawang Alun Train: from Rp 30,000 to Rp 65,00017. Rajabasa Train: from Rp 30,000 to Rp 65,000

18. Buser/Serelo Train: from Rp 30,000 to Rp 55,00019. Putri Deli Train: from Rp 20,000 to Rp 45,00020. Siantar Ekspres Train: from Rp 20,000 to Rp 40,000

Source: Kemenhub, processedBisnis/Husin Parapat

11. TRANS-SUMATERA TOLL ROAD: Government Begins Construction ofFirst Two Segments

Bisnis Indonesia, 1 October, 2014, Page 25, Section: Transportasi & InfrastrukturBy Fitri Sartina Dewi [email protected]

JAKARTA - The government will begin the construction of two out of the four priority trans-Sumatera tollroad segments on 8 October 2014, namely Medan - Binjai and Palembang - Indralaya.

Director General of Highways (Bina Marga) of the Ministry of Public Works (PU), Djoko Murjanto, saidthat the work process of the two toll road segments will experience a little change, i.e. the work will notstarted with the Medan - Binjai segment, but it will begin with the Palembang - Indralaya segment.

"There has been a change, where we initially predicted the Medan - Binjai segment to start first in gettingconstructed, but because of land acquisition constraints, then the work will begin with the Palembang -Indralaya segment," he said on Tuesday (30 September).

According to him, the Palembang - Indralaya segment will be done first because its land acquisitionprocess has registered a significant progress and it has been targeted that the land acquisition processcan be completed by the end of this year.

He explained that President Susilo Bambang Yudhoyono (SBY) has indeed issued a Presidential Regulation(Perpres) that assigns PT Hutama Karya (Persero) to carry out the construction of the four toll roadsegments in the Trans-Sumatera line.

However, he said, before carrying out the construction process, Hutama Karya (HK) must meet a numberof requirements, such as submitting a business plan. Then it has to form a toll road business entity (BUJT)and signed a toll road concession agreement (PPJT) with the Toll Road Regulatory Agency (BPJT).

"It seems that HK will already be able to conduct groundbreaking [first pole erection] in December 2014,provided that its PPJT has been signed," he said.

For the business planning process, the government has given a month to HK to prepare and submit it tothe Ministry of Public Works. Corporate Secretary of PT Hutama Karya, Ari Widiyantoro, claimed that hiscompany will be able to finish the process of preparing a business plan in a timely manner, which is by


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October 2014.

LAND ACQUISITIONHead of Sub Directorate for Land Acquisition of Directorate General of Highways of the Ministry of PublicWorks, Achmad Herry Marzuki, said that to acquire land in the Palembang - Indralaya segment, his office

has adopted the new rules contained in Law No. 2/2012 on Land Procurement for Public Purposes.

"We have used the new rules for the Palembang - Indralaya segment, and so far the process has beengoing well, and the progress has even been significant. It is targeted that by the end of this year theacquired land can reach 100 percent," he said.

According to him, the land that has been acquired for the Palembang - Indralaya segment has justreached seven km of the total length of 22km. However, he said that until now the process ofcompensation payment to affected people has proceeded pretty smoothly.

"We need additional funds to pay compensation to the community and accelerate the process of land

acquisition," he said.

Meanwhile, for the Medan - Binjai segment along 16km, Herry said that the land acquisition process isstill at zero percent. That is because most of the land to be used for the construction of Medan - Binjaisegment belongs to PTPN II.

If the letter of assets release from the BUMN Minister, Dahlan Iskan, has been issued, he said, theprogress of land acquisition will increase to 70 percent.

Herry said that his office has pushed for an expedited release of the land assets belonging to PTPN II fromMinistry of BUMN to Directorate General of Highways through a permission letter sent on 23 December

2013 and with a copy sent to BUMN Minister, Dahlan Iskan.

"We sent the letter a year ago, but until now there has been no reply from the Minister of BUMN. Wehope the letter will be responded to as soon as possible, so that progress can be increased," he said.

Djoko Murjanto admitted that the land acquisition process in the Medan - Binjai segment is very difficultindeed and it takes a long time. That is because some of the land owned by PTPN II has been illegallyoccupied by people.

Thus, a permission letter from the Ministry of BUMNs is needed to be able to quickly relocate people whooccupy the land illegally.

Shares of Hutama Karya Absorbed by Three Construction Sector BUMNsJAKARTA - The shares of PT Hutama work will be taken by three construction sector BUMNs who act asinvestors in the construction project of the Medan - Kuala Namu - Tebing Tinggi toll road segment.

Ari Widiantoro, Corporate Secretary of PT Hutama Karya (Persero), said that the company will sell a 15percent stake in the consortium for the construction of the toll road project in North Sumatera.

"[The plan] will be discussed with the BUMN consortium. Later, in line with the investment auction rules,the three BUMNs can absorb Hutama Karyas shares, " he told Bisnis Monday (29 September).

Hutama Karya holds 15 percent shares of the BUMN consortium that works on the Medan - Kuala Namu -


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Tebing Tinggi toll road project. The three other BUMNs are PT Jasa Marga (Persero) Tbk. with 55 percent,PT Waskita Karya (Persero) Tbk. with 15 percent and PT Pembangunan Perumahan (Persero) Tbk. with 15percent.

He said that the shares owned by Hutama Karya will be released in whole or in part, in accordance with

the wishes of the other shareholders. Each construction sector BUMN can absorb 15 percent of theshares in accordance with the agreement.

According to him, the process presently undertaken is still at the stage of exploration. The companywould like to release the shares in the near future.

Hutama Karya has prepared an investment with a 15 percent portion of the Rp 6 trillion. Until now, thecompany has spent about Rp 180 billion for the project. (Sukirno)

Brief Profile of the Trans-Sumatera Toll Road ProjectLength : 2,600km

Number of Segments : 23 segmentsPriority Segments : 4 segmentsAssignment to : PT Hutama KaryaConstruction Target : December 2014

Several Priority Segments of Trans-Sumatera Toll Road1. Medan - Kualanamu - Tebing TinggiTotal Length : 61.7kmGovernments Portion : 17.8kmBUJTs Portion : 43.9kmInvestment : Rp 4 trillion - Rp 6.2 trillion

Construction : Rp 540 billionLand Cost : Rp 441 billionNumber of Sections : 2

2. Medan - BinjaiLength : 15.8kmLand Investment : Rp 256 billionConstruction Investment: Rp 1.3 trillion

3. Palembang - Simpang IndralayaLength : 22km

Land Investment : Rp 200 billionConstruction Investment: Rp 1 trillion

Sources: Various, processedBISNIS/HUSIN PARAPAT

12. PORTS: Lino: Cilamaya Project Should be Stopped

Bisnis Indonesia, 2 October, 2014, Page 29, Section: Transportasi & InfrastrukturBy Muhammad [email protected]


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JAKARTA - The government's plan to develop the Port of Cilamaya has been assessed by the port servicestate-owned enterprise (BUMN) PT Pelindo II, instead, as something that does not need to be pursuedfurther, following the construction completion of the Port of New Priok in Kalibaru, North Jakarta.

President Director of PT Pelabuhan Indonesia (Pelindo) II, Richard Joost Lino, said that the origins to theplanned development of Cilamaya is to help (back up) the Port of Tanjung Priok, which was planned to bedeveloped only by the extent of one km area, with a capacity of 1.5 million TEUs.

However, along with the development of New Priok, the total container capacity, when combined withthat of the Port of Tanjung Priok, could reach 20 million TEUs.

Thus, he said, the plan for the development of Cilamaya is no longer needed. At the initial stage, headded, Container Terminal (CT) I of New Priok I will also be completed and become operational by mid-2015 "If Priok [has a capacity of] 20 million TEUs, may be only in 2040 that [logistics] needs Cilamaya," hesaid, Wednesday (1 October).

However, Chairperson of the Indonesian National Shipowners' Association (INSA), Carmelita Hartoto, hada differing view. She said that the construction of Cilamaya Port needs to be continued to supportindustry that has begun to grow in West Java.

Later, Cilamaya also will make the owners of goods to have many port options when they distribute theirgoods. "It should not happen that we [Indonesia] is deemed inconsistent by investors from abroad."

Carmelita, who is also Vice Chairperson of the Indonesian Chamber of Commerce and Industry (KadinIndonesia) for Logistics and Shipping, urged that the Port of Cilamaya be built soon.

This is because Tanjung Priok no longer supports the national logistics system efficiently. Although NewPriok has been completed, he said, the position of the Tanjung Priok Port, which is located in the citycentre, contributes greatly to congestion, so as to trigger the high cost of logistics.

All this time, approximately 60 percent - 70 percent of the national logistics flows has been handled viaTanjung Priok. Meanwhile, the potential of logistics business reaches Rp 1,400 trillion per year. Thus, thelogistics business, which revolves with its main gate being Tanjung Priok, amounts to more than Rp 500trillion.

According to her, the Tanjung Priok port operator also should not be afraid to compete with the presenceof Cilamaya, which is located in the hinterland, as the interests of society should take precedence.

"The solution is that the burden of Priok should be shared by preparing a substitute port, or a larger portof comparable class to Tanjung Priok," she said.

SHIFT OF CHANNELMeanwhile, with regard to the polemic on the development of Cilamaya, which is assessed to disrupt thegas pipeline owned by PT Pertamina, Ministry of Transportation (Kemenhub) has proposed a shift of theshipping channel of Cilamaya by 3,000m to the west, with a dock clearance distance of 5,000m.

Kemenhubs suggestion is a follow -up of the study by independent consultants Mott McDonald and DNV-GL and Booz & Co., as Supervisor Consultant, in June 2014.


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In addition, along the port channel in Cilamaya, signals will be placed to mark the shipping line, as well asdetermine the location of the prohibition to throw the anchor at some points where a gas pipeline islocated.

Data from Kemenhub show that the construction of Cilamaya is estimated to require a total cost of Rp

34.5 trillion, which is divided into two stages.

In the first phase, the total cost required is Rp 23.9 trillion. At this stage, the development ofinfrastructure consists of a container terminal with a capacity of 3.75 million TEUs and a car terminal witha capacity of 1.03 million CBU units.

CT I Targeted to Become Operational in Mid-2015JAKARTA - PT Pelindo II or Indonesia Port Corporation said that the company is accelerating works onKalibaru Port (or New Priok Port) development project through the operation of Container Terminal I.

Chief Financial Officer (CFO) of PT Pelindo II/ IPC, Orias P. Moedak, claimed that the first phase of Kalibaru

Port development project, which has been conducted since 2012, has achieved significant progress.

He said that the first phase construction includes Container Terminal I (CT I) along 800m. According tohim, the CT I construction progress until now has entered the stage of overlay or plating.

"The CT I works are targeted to reach 50 percent completion by December 2014," he said, Wednesday (1October).

He said that his company targets CT I works can be fully completed and it will become operational bymid-2015. After completion of CT I works, he said, IPC will again carry out the process of contractortender for the execution of CT II works.

When CT I has been fully built and put into operation, he said, the terminal is predicted to increase theaccommodation capacity by up to 1.5 million TEUs.

however, if the New Priok Terminal has become fully operational, the accommodation capacity couldreach 15 million TEUs.

He said that the construction of the New Priok Terminal has received support from the new governmentof Joko Widodo - Jusuf Kalla. (Fitri Sartina Dewi)

Development of Cilamaya Port

Phase I Investment: Rp 23.9 trillionStages of Development: Container Terminal of 3.75 million TEUs, car terminal of 103 million units, oildock, ro-ro terminal, shipping channel with a depth of -17 M Lws.Phase I Scope of WorkBreakwater, outer seawall/revetment, dredging, reclamation, oil jetty, access roads and bridges, pier,container yard, procurement of loading and unloading equipment, other supporting facilities.

Phase II Investment: Rp 10.6 trillionPhase II Scope of Work: Continuation of container terminal construction from Phase I, namelyconstruction of access roads and bridges, reclamation, procurement of loading and unloading equipment,other supporting facilities.


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Technical Data of New Priok PortCompany: PT Pelindo II or IPCTotal Budget: Rp 24 TrillionConstruction: 2012Operational Target: 2018

Capacity: 15 million TEUs

Sources: Various, processedBISNIS/HUSIN PARAPAT

13. PORT SECTOR HOLDING COMPANY: Dahlan: Pelindo Merged in2015

Bisnis Indonesia, 3 October, 2014, Page 28, Section: Transportasi & InfrastrukturBy [email protected]

SURABAYA - State-Owned Enterprises (BUMN) Minister, Dahlan Iskan, has affirmed that PT PelabuhanIndonesia I, II, III, and IV as well as related BUMNs should be merged into a single holding company nextyear in order to accelerate the implementation of the sea tollways.

"If indeed [the concept of] sea tollways must be realised, PT Pelabuhan Indonesia [I, II, III, IV] shouldbecome a holding [parent company]," he said, Thursday (2 October).

Plt . (ad interim) Minister of Transportation, Bambang Susantono, made a positive gesture to the plannedestablishment of a holding company for the state-owned port sector firms. He said that the port sectorBUMN holding can make the performance of each company increasingly positive.

One of the governments plans that can be realised soon with the formation of this holding company isthe inaport net program. He expressed optimism that the realization of the inaport net programme canbe faster than the set target.

"From the side of the regulator, we ensure the rules of the game for services and the community. So, it ismore in that direction," he said.

President Director of PT Pelabuhan Indonesia III (Persero), Djarwo Surjanto, claimed his company wouldfollow the wishes of the government as a shareholder of the company, with regard to the plannedmerger of port-sector BUMNs.

He assessed that the plan to have a port sector BUMN holding company could be positive and negativefor each of the merged companies. "If there are a lot of positive effects, well, just do it; but if thenegatives are many, it should not be done."

Pelindo III expressed its readiness to welcome the planned programme of the new government, whowants to implement the concept of the marine tollways, or domestic transhipment on the nationalnetwork.

The concept of marine tollways is essentially a wish of the government to accelerate connectivity withinthe framework of implementing the national logistics system through sea transport from the western end


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to the eastern tip of Indonesia. This concept requires improvements and efficiency so that the ports willbe able to accommodate large capacity ships.

His company has made a more in-depth assessment of a number of ports managed by Pelindo III. Onaverage, the ports managed by Pelindo III has a [pool] depth from -14m LWS to -16m LWS and they can

accommodate large-capacity vessels. "Tanjung Perak Surabaya is ready to serve the sea tollways. Wehave prepared all the ports in line with the activity level of each port; we are preparing," he said.

SHIPYARD BUMNsDahlan Iskan said that, besides PT Pelindo I - IV, the government is also making a design to merge anumber of state-owned companies in the shipyard sector, i.e. PT PAL (Persero) and PT Dok andPerkapalan (Persero) into the state-owned port-sector holding company.

Although the House of Representatives (DPR) has prohibited the government from merging the BUMNsinto a holding company, Dahlan has remained unmoved. He is optimistic that the new legislators cannegotiate to pass the plan for the holding company.

"[This is done] because the goal is to make progress. We will discuss it without being emotional, but it willbe done rationally. If it is for the good of the companies, what would be done should not be done soemotionally," he said.

Until now, the government has established five BUMN holding companies, i.e. PT Semen Indonesia(Persero) Tbk., PT Pupuk Indonesia (Persero), a reinsurance BUMN holding company, a BUMN holdingcompany in the plantation sector and in the forestry sector.

The formation of holding BUMNs is part of the programme for downsizing (right sizing) the number ofBUMNs, which is made to improve efficiency and create large-sized state-owned companies in each

sector.

The government aims to create around 14 - 16 BUMN holding companies and will reduce the number ofBUMNs from 138 companies currently.

Currently, the total assets of BUMNs in the logistics and trade sector in 2012 amounted to Rp 33.12trillion. Meanwhile, the total assets in 2013 was estimated at Rp 35.8 trillion. In the company work planbudget (RKAP) this year, the total value of assets is targeted to reach Rp 37.62 trillion.

Several Strategic PoliciesOrganisation of Maritime Transportation

1.

Deregulation and de-bureaucratisation of national shipping arrangements2. Development of national maritime transport network3. Reposition of the role of port sector BUMNs4. Financing and budget management governanceSource: Indonesian Transportation Society, processed

Several Ways to Build Efficient, Integrated and Connected Logistics System1. Modernise Infrastruktur by involving the private sector on a massive scale2. Efficient, inter-island connectivity3. Improvement of human resources4. Increase in the use of information technology for efficiency purposes5. Switch from basic commodity export products to high-value commodities


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6. Becoming a gateway for international shipping

Source: Maersk Line, processed

14. Waste Management Facilities Inadequate

Media Indonesia, 3 October, 2014, Page 14, Section: HumanioraBy Vera Erwaty Ismainy

There has only been one integrated waste management centre in Indonesia. In fact, economic activitieshave led to an ever rising production of waste.

Environment Minister, Balthasar Kambuaya, said that the use of chemicals has continued to rise in linewith the scores of industrial activities that support economic growth. This can be seen from the increasein the number of permits for the management of hazardous and toxic waste (B3) issued by the Ministryof Environment (KLH).

"The permits issued by the Ministry of Environment increased by up to 44.6 percent. From 112 in 2012 to258 licenses in 2013," he said in a workshop themed Challenges in Waste Management TowardsSustainable Development held by PT Prasadha Pamunah Limbah Industri (PPLI), in Cileungsi, Bogor, WestJava, yesterday.

The increased use of chemicals that produce B3 waste, according to Balthasar, cannot be separated fromeconomic growth, population, and the Master Plan for the Acceleration and Expansion of IndonesianEconomic Development (MP3EI) scenario.

What has been a problem: the inadequate number of waste management centres creates the potential of

pollution and environmental damage. In the future, Indonesia will need more waste and B3 wastemanagement centres in many regions.

"The rising use of chemicals and [production of] B3 waste has implications for pollution andenvironmental damage if it is not properly managed. The government encourages the establishment ofwaste management centres throughout economic growth centres." Balthasar also explained that thedevelopment of the Draft Government Regulation (RPP) on B3 waste has now reached the final stage.

"The RPP is prioritised to be passed before the end of the United Indonesia Cabinet II administration. Ihave put my initial on the RPP; only the initials of some other ministers are needed, namely Minister ofEnergy and Mineral Resources (ESDM), Minister of Trade, Minister of Industry, and Minister of Home

Affairs," Balthasar said.

Some of the matters covered by the RPP pertain to the degree of danger of the B3 waste and utilisationof the B3 waste.

Specific requirementsAt the same occasion, Secretary of the Ministry of Environment, Rasio Ridho Sani, said that today PPLI hasbeen the only integrated waste management centre in Indonesia. The lack of facilities like PPLI has led tosub-optimal management of waste.


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PPLI provides facilities for recycling, collection, handling, as well as safe disposal of toxic waste and B3waste. "To obtain a waste management license, there are strict requirements and mechanisms to follow,"said Rasio.

The requirements that must be met include, among others, th e companys having an environmental

permit, having a landfill or B3 waste recovery field, as well as certified technology and human resources.

PPLI President Director, Koji Kuroki, said that if B3 waste is processed correctly, the contaminated landwill become green again and the groundwater can be utilised as well. [email protected]

Management of B3 Waste in IndonesiaPermits for Management of B3 Waste

- 2012 112 management permits- 2013 258 management permits

Causes of the Rising Use of Chemicals

-

Economic growth- Number of population- Scenario of Master Plan for Acceleration and Expansion of Indonesian Economic Development

(MP3EI)

Management Hurdles- Lack of awareness for waste management- Lack of information on waste water processing plant (IPAL) technology- Inadequate capacity of human resources (SDM) who master waste processing technology- Inadequate availability and spread of waste management centres, facilities and infrastructure

Requirements to Get Waste Management Permit- Company must have an environmental permit- Having landfill or land for B3 waste recovery- Having certified technology and certified/professional human resources

Source: Ministry of Environment/MI Team

15. INFRASTRUCTURE: World Bank Readies Rp 6 Trillion to Assist LocalGovernments

KOMPAS, 2 October, 2014, Page 17, Section: Ekonomi Author not mentioned

JAKARTA,KOMPAS - The World Bank has allocated an additional US$ 500 million, or equivalent to Rp 6trillion, to improve the accountability of infrastructure projects in the regions. The programme targetsimprovements of the financial statements, technical matters, and enhanced monitoring of public servicessourced from the special allocation fund (DAK) and contributions from local governments.

World Bank Country Director for Indonesia, Rodrigo A Chaves, mentioned this in a press release receivedin Jakarta on Wednesday (1 October). The funds are channelled to provinces other than Aceh, Jakarta,Papua, and West Papua.
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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"Accountability of local governments have a direct impact on the quality of public services received bythe public. This project aims at improving the efficiency and effectiveness of the use of budgets in theregions," said Rodrigo.

Public service responsibilities have devolved from the national government to the sub-national

governments in the last 10 years. There are regions that have become developed, but there are alsothose where the quality of public services has declined, instead.

The World Banks Senior Specialist of Urban Affairs, Taimur Samad, added that the increased capacities ofgovernment officials in financial management, procurement management, and investment planning andmaintenance are targeted. This project is measured from the transparency and accountability[prescribed] by the Development and Finance Supervisory Board.

Separately, Executive Director of Regional Autonomy Implementation Monitoring Committee, RobertEndi Jaweng, said that capacity building in the governance of infrastructure budget is essential for theaccountability of funds management. Inefficiency and corruption have been a major challenge in

infrastructure investment because rent seeking has shifted from the auction process to the stages ofproject implementation and supervision.

Executive Director of the Institute for Development of Economics and Finance (Indef), Enny Sri Hartati,said that programmes that encourage budget accountability are good. "It should not happen that thesefunds will instead become an opportunity to enlarge Indonesian foreign debt," she said. (HAM)

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