FREIGHT EXPECTATIONS

Indonesia 2018 | TRANSPORT | INTERVIEW

TBY talks to Edi Sukmoro, President Director of Kereta Api, on the rising importance of freight, solving Jakarta's transport ills, and helping the government solve logistics costs.

Edi Sukmoro
BIOGRAPHY
Edi Sukmoro joined the firm in 2013 and was appointed as President Director in October 28, 2014. He previously served as Director of Land and Building Assets. He has a degree in civil engineering from the Institut Teknologi Bandung (ITB). He obtained his master’s in development technology from Melbourne University.

How did you achieve your strong numbers in 2017?

Our achievements in 2017 came from passenger revenues as well as freight. Revenues increased significantly, though the company expended great efforts in the process. The share of passengers and freight revenues were each 50% in 2017, though passengers previously made up a larger percentage. We are keen to evaluate freight transportation because there are excellent opportunities in Indonesia currently. The president supports the transportation of freight by train whenever possible, as it benefits the country. There are also less accidents than on the road and reduced pollution. However, some of the regulations should be applied equally for both trains and trucks, such as the maximum permitted tonnage. We always obey the regulations and have asked the government to ensure they are enforced for trucks.

How do you balance the different types of passenger transport?

There are three kinds of passenger transportation: local, medium, and long-distance transportation. The commuter line today sees a maximum of 1.076 million passengers a day, and this is critical because it keeps cars and motorcycles off the roads in Jakarta. Now, Indonesian Railway and the Ministry of Transportation have to solve the problem of local, medium, and long-distance trains all sharing the same tracks. In modern countries, local and long-distance trains are on different tracks, which we should be doing. We will separate these two trains in order to maximize train journeys.

How will you spend the capital from your recent bond issue?

There are two purposes for the money. One is to support the Indonesian Railway Company, our subsidiary that runs the airport train. The second is to renew our wagons that are more than 30 years old. We will purchase new wagons to provide passengers with excellent services. This will bring us up to 880 wagons, though we already purchased 438 wagons.

Do you have any plans to issue a subsidiary IPO in 2018, and what would that achieve?

We have six subsidiaries, and the commuter company has a great opportunity to list on the stock exchange. However, we still are evaluating if there will be an IPO in the near future.

What is the current stage of the Greater Jakarta Light Rail Transit (LRT) project?

The LRT, which was assigned to Indonesian Railway, is still under construction. We hope it will be commercially viable by mid-2019 and a commercial success. The existing commuter line sees over 1 million passengers a day, and we hope the LRT will help solve the transportation issues in Jakarta. This is a problem not only in Jakarta but also in other large cities, so we are considering developing an LRT in Bandung and Surabaya.

What are some of the other large projects close to completion that are important for the company?

We have projects built by the Ministry of Transportation, such as the Palima LRT, which will be operational by June 2018. In addition, there is the airport railway in West Sumatra, whose infrastructure was built by the government and rolling stock and trains by ourselves. This will help us in terms of revenue.

What are your other ambitions for 2018?

There is the airport train in Surakarta that will be commercially operational in 2018 as well as a double track in South Sumatra that will allow us to maximize freight transportation. Currently, there are up to seven companies on the waiting list to transport coal from mines. In 2018, we also plan to purchase 15 locomotives. Indonesian Railway provides a public service, so this is not a pure business. We seek to help the government solve logistics costs.