New bill to overhaul rail industry

Ridwan Max Sijabat, The Jakarta Post, Jakarta

The rail transportation bill currently being prepared at the House of Representatives ends the state's monopoly on the industry and requires an audit of state railway company PT Kereta Api (PT KA).

Putra Jaya, chairman of the working committee assigned by the House of Representatives to prepare the bill, said a thorough audit was needed to separate PT KA's assets from the state's assets in the company and assess the status of the company.

"The audit must be completed within three years," he told The Jakarta Post here Friday.

Following the bill's endorsement, scheduled for March 27, the government and PT KA are also required to conduct a technical audit as a preliminary step toward rehabilitating all facilities and railway networks on Java and Sumatra.

"All these problems have contributed to the state-owned company's service to the public and they have to be settled to regain the public's trust in railway transportation," Putra said.

The transitional ruling also stipulates that all trains, wagons, railway infrastructure and networks are to be audited and repaired to make trains an alternative cheap and safe public transportation mode.

"The public have the right to cheap and safe transportation and the government has an obligation to provide it in compensation for the taxes the people pay to the state," he said.

PT KA's management will also be asked to increase the salaries of all employees whose status was not upgraded when the firm became a limited company in 1992. Since 1992, all employees who were originally recruited as servicemen have been underpaid and have not been registered with social security programs.

The bill also opens the way for national corporations to take part in the rail industry, although it does not set out detailed regulations.

"The government will issue a regulation detailing the private sector's involvement in the train business. The bill gives only general rules," Transportation Minister Hatta Radjasa said in a meeting with the working committee Thursday.

The minister said that despite the bill, the government would remain the main regulator in the railway transportation.

He explained that the government would likely give concessions to national corporations to run monorails and mass rapid transportation in big cities and run special trains to transport coal, fuel and other commodities.

He said that several national companies had proposed setting up special trains in Kalimantan to transport fuel and coals.

PT KA president Ronny Wahyudi hailed the bill, which he said would encourage his company to be more competitive and efficient in the future.

"It is a good plan and will make us healthier. We will work efficiently in order to compete with trains operated by private companies," he said.

Chief of the Federation of International Transport Workers in Jakarta Hanafi Rustandi, however, said that the bill was prone to manipulation.

"The bill will not benefit the public ... therefore there must be room for the public to raise their views on its substance," he said.

Putra said the bill invited national corporations to take part in the train business but they would not be allowed to use infrastructure and networks belonging to the state and PT KA.

"The private sector is invited to invest by establishing their own networks and the tariffs will be decided by the government," he said, adding that the concession would be valid for 35 years and after it expired, all their train businesses would be taken over by the government.

The bill, which will replace the 1992 Railway Operation Law, is one of the four bills being prepared by the government and the House on the management of sea, air and land transportation in Indonesia.