Publication & Articles

Aug 2018

By: Scott Younger

Forbes Indonesia

AS THE BIG LEBARAN mudik (homecoming) came to an end last month, particularly from the city of Jakarta, most of the population must have paid greater attention to the preparedness of the road network, particularly of toll and main national roads. Each year some more kilometers of toll roads are added to the network, but the plan to have operating a further 1,000 km during the lifetime of this government has fallen behind.
 
The consequence of inadequate road infrastructure is manifest in high logistic costs, and Indonesia has the unwanted reputation of having the highest in Asia. Therefore, completing the toll road network and expanding it even further for the future, as a recent study has concluded, has to remain a priority.
 
One key reason for delay concerns the remaining issues around land acquisition, despite legislation to overcome difficulties for the chosen routes. Resolution of disputes is still time consuming.
 
A second important matter relates to the involvement of the private sector that currently play only a minor role in investment and ownership. Furthermore, in construction a serious matter seldom addressed is the lack of private contractors for the construction phase of a project.
 
Those that were in place a few years ago felt that the structure of the industry was not conducive for their involvement. As a result, the major SOE contractors, all capable of producing good work, are overstretched and not unnaturally have let their standards dip from time to time.
 
In short, the volume of work to be done in the roads sector over the next decade and beyond, within a required timescale, especially in Java, is beyond what the SOE companies can sensibly deliver. This is a major challenge when future forecasting of travel demand in Java indicates the need for doubling the capacity of today’s unfinished toll road network, along with extensions and improvements to the national network.
 
The next decade will also see a greater use of electric vehicles and changes in the way roads are designed to respond to the new focus on smart city urbanization under Transport Oriented Development (TOD).
 
In summary, the road transport network needs not only to expand at all levels, but be ready to embrace pending changes in the design and use of the many new urban nodes that will be springing up to accommodate the steadily growing urban population, forecast to increase by a further 90 million over the next 30 years.
 
While it is correct that much also is required to upgrade and extend the rail network, again especially on Java, and move a significantly greater quantity of freight by rail, the experience in developed countries has demonstrated that roads will continue to dominate the land freight transport market for the foreseeable future.
 
Off Java, there is still much to do to expand the regional networks. Indonesia is still well understated in the provision of roads across the archipelago, a key factor in terms of the high regional transport costs. This will be increasingly important when regional ports are upgraded, as part of the maritime strategy, and their economies can start to contribute positively to national growth.
 
In parallel, there needs to be encouraged the development of competent regionally based contractors which, in turn, will need more professional engineers and matching skilled workforces. The parallel urgency concerns education and training. In conclusion, there remains much to do to develop the nation’s road infrastructure and plenty of work for professional engineers.