Infrastructure Indonesia: Tender Soekarno-Hatta Airport Railway Delayed
The prequalification tender for the construction of the Soekarno-Hatta International Airport Railway project has been postponed until late October 2014 (from August) as agreements with several stakeholders still need to be finalized. For example, the government is yet to underwrite part of the required investment. Indonesia’s Ministry of Transportation proposes to underwrite IDR 13.5 trillion (USD $2.3 billion) - approximately 49 percent of total required investment for this railway project.
If the Indonesian government underwrites the project, then it is expected that there will be more interest in the railway project, specifically from the private investor community. The project will be realized under the public-private partnership (PPP) scheme with the Indonesian government. However, further discussions with Sarana Multi Infrastruktur and Pusat Investasi Pemerintah about the financing of the project are also still required.
Other matters that still need to be resolved are land acquisition in the Jakarta region and province of Banten (although most of the required land is already in public ownership), as well as the study of the environmental impact of the railway. Land acquisition is a well-known obstacle for infrastructure projects in Indonesia. The feasibility study was already finished in 2013. The route of the railway, which stretches across 33.8 kilometres from Halim in Jakarta to Soekarno-Hatta International Airport, has been set in Minister of Transportation Regulation No 1264/2013.
Reportedly, there are 19 investors - both domestic and international - that are interested to participate in the railway project. Construction is targeted to commence in early 2015 and will take at least four years.
The Soekarno-Hatta Airport Railway aims to relieve grave traffic congestion from and to the Soekarno-Hatta International Airport, located nearby the capital city of Jakarta. Currently, Soekarno-Hatta Airport, which was ranked the world’s 8th busiest airport in terms of passenger numbers (year 2013), is only accessible by motorized vehicle (such as cars, motorcycles or bus transportation). However, due to continuously rising passenger numbers at the airport, in combination with the lack of infrastructure development, traffic to Soekarno-Hatta has become congested.
In 2013, Soekarno-Hatta handled a total of 62.1 million passengers, a 3.7 percentage point growth from the previous year (60 million). In February 2014 it was reported that the airport operates 1,200 daily flights for 44 foreign airlines and 19 domestic ones. However, due to Indonesia’s rapidly expanding aviation sector (supported by rising per capita GDP), the government expects that the total number of passengers that pass through Soekarno-Hatta will grow to 80 million per year by 2019 or 2020. In fact, the airport is currently undergoing a large renovation as it had been operating at overcapacity in recent years. Terminals I and II are being renovated to enlarge passenger capacity to 18 and 19 million people respectively (from nine million each, now). Terminal III will be able to handle 25 million passengers after renovations have finished in 2015 (from currently four million). Meanwhile, flight capacity is being expanded from 64 flights per hour in 2013 to 72 flights per hour this year and to 85 flights per hour in 2015.
With air passengers rising rapidly, infrastructure around the Soekarno-Hatta airport should be improved as well. At a number of locations, for example around the Soekarno-Hatta Airport and in Cawang (East Jakarta), the railway will be built below the ground as an elevated railway structure is considered impossible at these locations. This will increase costs as the development of an underground railway structure requires about IDR 1 trillion (USD $85.5 million) per kilometre, while an elevated structure costs about IDR 300 billion (USD $25.6 million) per kilometre.
The train is estimated to reach a pace of 135 km per hour and will serve five stations in Jakarta (Halim, Manggarai, Dukuh Atas, Tanah Abang and Pluit) as well as terminals I and II at the Soekarno-Hatta Airport. Total traveling time from Halim (starting point) to the airport is estimated to be 30 minutes, a marked improvement from current journeys with motorized vehicles (which can take up to two or three hours). The government expects that about 20 percent of total number of air passengers at Soekarno-Hatta will use the train service (which would have been around 12 million train passengers if the service had been available in 2013). An indication of tariffs for the train tickets has not been given yet but the government said ticket prices should be at a competitive price. Currently, a taxi drive from the centre of Jakarta to the airport costs approximately IDR 120,000 (USD $10.3), while a one-way bus service (Damri Bandara) costs IDR 30,000 (USD $2.56).
This project is procured as a PPP project in compliance with Presidential Regulation (PR) 67/2005 on Cooperation between Government and Business Entity in Infrastructure Provision (as amended by PR 13/2010, PR 56/2011 and PR 66/2013).
The role of the private sector in this project is to:
• Undertake the engineering design
• Construct the civil works for the rail infrastructure (earthworks, structures, rail track, power supply, signalling, train stations, power station, depot and workshop)
• Procure the rolling stock
• Finance a substantial part of the project
• Operate and maintain the railway and rolling stock during a long concession period