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Multi Modal Transport Planning Experience
Transport Sector Strategy Study for Indonesia
Asian Development Bank (Funding Agency)
BAPPENAS & DGLT (Executing Agency)
Multi Modal Transport Planning & Strategy
The study is primarily focussed on the regional multi-modal transport
system for Indonesia. The many background and sub-sector studies that
comprise TSSS have confirmed the dynamic, interactive nature of
transport, and its relationship to social, economic and regional
development, competitive markets, land use planning and the
environment. The work has benefited from a wide range of inputs and
guidance from the Government of Indonesia (GOI) Steering Committee,
Technical Team and Working Groups comprising representatives of the
Ministry of Communications (MOC), BAPPENAS the National
Development Planning Agency and other relevant Departments and

TSSS was initially designed to assist GOI, i.e. MOC, in preparing a
strategic transport policy framework for Repelita VII (1999-2004),
including the identification of strategic programs and projects that fit
within that strategic policy framework. The basic assumption was that the
economy would continue to grow at a rate of more than 7.0 percent per
annum and that there would be no significant changes in the way the
public sector was being managed. But due to the financial and economic
crisis that befell the region during 1997-1998 and its subsequent political
changes, Repelita VII was never implemented and TSSS needed to be
reoriented towards new policy frameworks based on the new economic
platform and other new socio-political settings.

The transport sector was particularly badly damaged by the downturn.
Due mainly to deferred maintenance and rehabilitation resulting from a
drastic budget cut, more than 50 percent of about 290,000 kilometers of
national, provincial, and district road networks is reported as having
deteriorated into unstable conditions, reducing travel speeds
significantly, and resulting in economic losses to users. Air transport lost
40 percent of the fleet and many domestic and international routes have
been eliminated: air passengers also declined consistently due to low
purchasing power. The spiralling rise of US dollar value to rupiah
increased the price of spare-parts of buses, automobiles, and other
transport fleets by more than three times. City bus and inter-city bus
services had been declining steadily and in order to stay in service,
spare-parts have had to be cannibalised and/or fleet maintenance
deferred, thus endangering safety.

It became apparent that infrastructure projects would have to be either
postponed or reviewed. A Presidential Decree (Kepres) was issued in
September 1997 in which 81 projects were postponed and 62 others
were reviewed. These included government and state-owned enterprise
(BUMN) projects and projects owned and built by private sector but with a
close link to the government, and projects funded by foreign loans and
export credits. Most were power generation, transport infrastructure, and
toll road projects.

Against this background of significant economic, financial and political
change a number of major and inter-related transport issues can be
identified :
  1. There is likely to be a shortage in public sector funding to cover all
    the transport sector’s needs, especially in the short-term;
  2. Although the private sector has been encouraged for some time to
    participate in financing and operating transport infrastructure and
    services, a number of complex and inter-related issues (financial,
    economic and regulatory), are currently conspiring to frustrate
    government’s aims and aspirations;
  3. There is a lack of clarity at national and regional levels as to how
    transport strategy should support and stimulate government’s
    economic, social and development objectives; this has been partly
    created by the continued separation of responsibilities for road
    provision, traffic and transport planning and land use planning.
  4. The impact of the implementation of decentralisation and regional
    autonomy laws in early 2001 is likely, at least in the short term, to
    further fragment transport planning responsibilities in the absence
    of a cohesive national framework.
  5. Pricing, cost recovery and productivity policies are often prepared
    in isolation, rather than within an integrated framework, and in
    some instances appear contrary to established practices
    elsewhere.Policies on tariff levels for example, as between
    economy rail and bus are set to favour rail, but little is known or
    made explicit about elasticities of demand on which to base such
    decisions, nor on the wider socio-economic benefits of such a
  6. Many of the above problems and issues at the national level relate
    to the transport planning data base which is neither
    comprehensive nor consistent, and at times leads to ad-hoc
    planning and decision-making, a lack of transparency and potential
    inefficiency in the allocation of resources.
PT. Pamintori Cipta