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Annas Rifai SAPPK, Institut Teknologi Bandung, Bandung, Indonesia March 27, 2012
Introduction Over the past years, the Dutch rail market has been comprehensively liberalized and thus opened to competition in passenger transport as well as freight transport. This process will persist in the future years as more open tender procedures are planned or ongoing. The reformation of the Dutch railways initiate in 1995, its designed to raise the market share of railways in on the whole transportation mode. in 1991 the Minister of Transport has received advice from the Wijffels select committee to to push reorganization of the national railway company, Netherlandse Spoorwegen (NS) had to divided into a number of division (passenger, freight, infrastructure management and allocation of infrastructure capacity). It occupied important deregulation, giving NS the freedom to decide its investment, finance, service supply, fares, and personnel policies. The modification was implemented by a transitional agreement for 1996-2000.
Figure 1. Main Public Institution; Source: European monitoring center on change In Indonesia until the last one and half-century, the national railway network which initially developed by Dutch Government, only established in Java and Sumatera Island. The total length of railway track in this network is 6,797 km, which is 4,675 km (68.78%) of operating line and 2,122 km (31.22%) of nonoperating line. Operating track consists of 3,327 km in Java and 1,348 km in Sumatera. In 2006, the contribution of railway based on national transportation share is lower than other transportation modes, only 7.32% of passenger transportation and around 0.63% of freight transportation. In contrast, road still dominates by nearly 84.13% of passenger transportation and 91.25% of freight transportation (MoT, 2007). 1
It changes relationship type between the two entities and also the operation scheme of railways. and the suitable relationship between the two entities is one of the most fundamental factors in turn that the railway can be operated efficiently. this part also content about the main reason and aims of reforms in Indonesian railway. KA (Indonesian Railway Company) in July 2005. The goals of these changes were to increase the performance of the business. NS Stations (develops and operates stations).After the interviews to PT. towards the establishment of better mass railway transportation. formerly NS Cargo (joint venture with Deutsche Bahn Cargo). and a new railway law has passed in March 2007. In the last part of this paper is conclusion.e. there has not been any new participant to the railway services in Indonesia as of December 2007. Secondly. and rules for pricing of network use (track access cost). Institutional Changes of the Dutch Railway European Directive 91/440 on the separation of railway infrastructure and operations was one factor triggering this transformation. 2004). In the years before. as well as in the pat section. to increase efficiency as well as to reduce government involvement. NS also has interests in other business such as Railion. in this section I will also present the performance of the Dutch railway according to it reformation. improving the market share of railways. this paper will present about Indonesia railway. railways had lost market share. firstly I will discuss about the vertical separation and reforms of the Dutch railway. the Director General of Railway (DGR). Therefore. and only PT. which will conclude all findings in this discussion before. it significantly changes the relationship between infrastructure and operation. Despite its stipulation. KA operates railway.. i. Indonesia’s railway industry. passenger and freight performance before and after separation. a Government body in Indonesia was established. I think very interesting to compare the performance of railways for each country before and after privatization or vertical separation. part of the Asia/ASEAN Railway Network. The Netherlandse Spoorwegen divided into NS Reizigers (passenger services). In 1991. and technical-operational issues. is still striving for improvement. Railway reforms especially in vertical separation. a brief story and vertical separation that held in Indonesia railway recently. both in passenger and in freight. 2 . and NS Vastgoed (manages property portfolio real estate). The structure of the paper In this paper I will divide into two main categories. the European Union initiated a process of institutional changes in European railways in order to improve the position of this mode of transport. the problems faced by Indonesian railway are more complex and dynamic due to social behavior. The institutional changes arranged by the European Union included separation between operation and network management. Once. third party access to the infrastructure. economy-financial. produced less output as well as increasingly needed financial support by governments (Nash et al. rules. It was decided that other entities such as local government and private sector permitted to operate railways accessing the existing tracks. Recently.
and for giving recommendation to the Ministry of Transportation. During this period. freight. The largest of these firms. Belgian National Railways and German Railways) as well as some other international connections. In the eastern part of the Netherlands. These movements toward contracting and tendering in regional passenger transport are largely the result of experiments related to the new passenger transport law (Wet Personenvervoer 2000) adopted in May 2000 did not involve competition but only the threat of competitive tendering in public transport if local state bus company and NS did not agree to cooperate and create an integrated bus-rail network. the institutional changes have resulted in increased competition. The three additional organizations are Railned. now has a market share of more than 80%. Passenger services now should cover operational cost (i. And. Current structure of Dutch railways On the main line of the network. So. which is the successor of the freight division of the former national rail company. at European level a process of concentration has emerged. Railion Nederland BV.e. In the other side. implying that this firm has lost almost20% of the freight market. After that . Here. A similar development was seen in the northern part of the country where NS Reizigers. The concession for the main national lines is given to NS for the period up to 2015. is providing passenger services. for allocating existing capacity (passenger. and NS Raillinfrabeher (infrastructure management). Railion Nederland BV is a subsidiary of Railion which is active in several European countries. NS Verkeersleiding (Traffic Control). Arriva (a British operator who entered the Dutch market) and a bank were granted a non-competitive contract by the provincial government of Fryslan (Friesland) to operate the integrated NoordNed bus-train network in neighboring province of Groningen. express and local train services on the main-time network. 3 . excluding infrastructure costs). NS. in Telfort (joint venture with British Telecom). state subsidies to NS for train operations were set to zero by the year 2000.and until recently. one firm. at present. NS Reizigers started a joint venture called Syntus with ConneXXion and Cariane Multimodal International (part of the SNCF Group) to operate an integrated bus-train network on the basis of non-competitive contract with the provincial government of Gelderland. charges for using the infrastructure were put at zero. Dissimilar to passenger transportation. eight freight operators offer services using the Dutch rail infrastructure. while NS international provided the Thalys high-speed services to Brussels and Paris (jointly with French National Railways). the main state-owned bus operator ConneXXion won the right to run a short local railway line from NS Reizigers by competitive tendering. freight transport shows competition in the market. In the first stage of this reform. Before this period. NS Reizigers provide all intercity. and infrastructure maintenance). Railned is responsible for licensing rolling stock operators. for observing railway safety. the 1995 reforms made competition possible and a number of new operators appeared from 1996-2000. this story begin when the Wijffels did not clearly propose the introduction of competition in passenger services.
2006 Figure 3 competitive tendering in railway. source: Anzir Boodoo.. Figure 2 Structure of the Netherlands railways network. source: Tendering and decentralization of regional rail passenger services in the NetherlandsVan Dijk. 2006 4 .
50 billion. changed since the early 1990s but did not result in a steady improvement: the total annual number of travel kilometers in 2004 about equals the number in 1991. The network has a moment ago recovered from the decline performance in the mid 1990s. domestic freight transport increased by only a few percentages over the whole period. total freight transport by railway increased by 54% in the Netherlands. i.e. the relative importance of international transport in the Dutch freight railway industry has increased from 66% in 1990 to 78% in 2004. Passenger transport The performance of passenger transport. while only Portugal produced a growth figure of comparable magnitude (i. but it grew by approximately 50% in the remaining years of that decade. but in 1996 this number extremely decrease into 14.35 billion. Figure 4 Transport performance of passenger transport in passenger-km. In the period 1990 . a mixed picture emerges. passenger transport has difficulties in realizing historical levels. This pace of growth exceeded all other European countries.Performance of Dutch Railways The major propose of the institutional reforms were to develop the performance of the business. to realize a escalation in output. In 1995 is the highest number of passenger-km travel 16. In the years 1990 to 1995. As passenger transport by other modalities. 5 .2005 Freight transport Since the mid 1990s. in particular car transport. 44%). both in historical context and compared to other European countries (Eurostat. The growth of freight transport is largely realised in international transport. has increased strongly in this period. annual total transport of goods by railway hardly changed. the market share of railways in the passenger transport market has declined significantly.09 billion passenger-km. and to boost efficiency.e. and continuously decreasing in 1997. After 1998 the passenger-km is gradually slight increasing and in 2002 the number of passengerkm is 15. Looking at the performance of Dutch railways. freight transport by rail in the Netherlands has shown a strong growth. measured in number of travel kilometers. As a result.2003. 2005). Source: Eurostat. while freight transport produced a remarkable growth in output.
Figure 5 Transport performance of freight transport in ton-km. Source: Eurostat.2005 Figure 6 market share of freight transport Source: Eurostat.2005 6 .
railways industry has been amended for many times. 2012 Institutional Changes of Indonesia Railways After Indonesian independence. and then converted as Perusahaan Jawatan Kereta Api (PJKA). in 1991. It began when Djawatan Kereta Api (DKA) transformed to Djawatan Kereta Api Republik Indonesia (DKARI) in 1950. Perusahaan Umum Kereta Api (PERUMKA) providing both public and semi commercial services. it changed to a state-owned enterprise. Paul Van Steen.Figure 7 the Netherlands railway network: Source: SPSP Lecture. but the essential things is there is only one firms play in this business. Later. These national railway institutions were the same institution oriented for public service with strong contribution of Indonesia government. Followed by Perusahaan Negara Kereta Api (PNKA) in 1963. Later 7 .
and PT. The main goals of the reform through vertical separation in Indonesia railways are: to involve the private sector and to encourage private investment for railway network growth. It marked the new beginning of the national railway business given the independence to perform commercial service. the progress of the railway segment relies greatly on insufficient government budgeting in this vertical separation. But all of the shares are owned by Government. although financial flow has not been sufficient even before the reform. KA has established a new subsidiary that operates for commuting in Jakarta Metropolitan Area. In the managerial structure. deteriorating condition of rolling stock and so on (Indonesian Railways 2002). and workshop. the performance has still not improved much in the last 10 years. which 90% of PT. KA has been gaining profits since the introduction of vertical separation. depots. The performance of Indonesia railways While PT. Nowadays PT. In 2001 passenger trains were delayed on average 36 8 . KA shares. The new railways Act which established in 2007 (UU no. Lack of the financial abilities of the government to accomplish the payment of the stipulated amount of costs has been regarded as the major reason of the failure to make a smooth railway operation.KA has been corporatized.KA from dynamic and liberalized management respond to the market’s demand. In addition. and to formulate the railways as the backbone of land transportation. accidents. Ownership of the infrastructure and financial responsibility for it was transferred to the government in the progression of the reorganization. other commerce entities as well as private sectors and local government were welcomed to enter in the national railway business. The main concern of reforms of the railway sector in Indonesia was to cover for past shortfalls in investment. Kereta Api Commuter Jabodetabek (PT. However.than it became Perseroan Terbatas Kereta Api (PT KA) as Limited Company. According to Indonesian Railways the main reason of Indonesian railways reformation are: the insignificant role of railways transport. It seems that.23 Th 2007) distinct end of the monopoly era of PT KA.KA must get an approval from Government in every important decision such as investment for upgrading. reduce to dependence on the government as regulator. The railway is still frequently facing daily operational and engineering problems such as delays. KCJ. It has been pointed out of the lack of autonomy hinders PT. lack of maintenance. minor role of the private sector. this non-fulfillment of the payment was resulted in organization troubles because of severance of finance among the different departments. As the monopoly advantage of PT KA had been redundant. to renew the maintenance arrangement and to make railways well-organized so that the transportation degree and revenues will enhance consequently. even though the state involved very high priority for initiatives to raise performance and to enlarge the ability of railway transportation. the enormous require for maintenance as well as improvement. PT. some challenges remained to trigger the management of the railway get better. this subsidiary named as PT. Range of Government’s responsibility on the infrastructure in Indonesia is excluding stations.
Figure 9 Indonesia passenger performance Source: MoT of Indonesia. 2008 Figure 8 presents the rate of change of the railway performance in contrast with the GDP. Passenger transport As well as the Dutch railways. the performance of passenger transport is measured in number of travel kilometers.2 in Sumatra island.KA has been experiencing some difficulties to develop its traffic performance. changed since the early 2007 but did not result in a steady improvement: the total annual number of travel kilometers in 2009 about equals to 19 million in Java Island. and slightly increase in 2009 at 20 million in Java island and 4. As the trend of the traffic shows. Figure 8 Indonesia railway performance compare to GDP Source: Kurosaki. The average delays for freight trains were more than those passenger trains. 2005).minutes for departures and 59 minutes for arrival.9 million in Sumatra Island. (Indonesian Railways. but in 2010 this number slightly decrease into almost equal with 2008 number 19.6 million passenger-km. and 3. even though the separation of financial task of the infrastructure in 1999. PT. 2012 9 .
the relative importance of international transport in the Dutch freight railway industry has steadily in 2010. 2012 10 . freight transport by rail in Indonesia has not shown a strong market.6 markets share for a whole transportation mode. Regarding to the graphic below.Freight transport Contrary to the Netherlands. annual total transport of goods by railway slightly changed. The growth of freight transport is largely realized in coal transport in Sumatra. for Java Island there is no significant growth. 2012 Figure 11 Indonesia railway network in Java Island Source: Indonesia Railway. especially in Sumatra Island. Figure 10 Indonesia freight performance Source: MoT of Indonesia. As a result. it only have 0.
the government owns almost all of the infrastructure except station. This pace of growth exceeded all other European countries. total freight transport by railway increased by 54% in the Netherlands. workshop. This reform also characterized by separation of financial responsibilities between government and the railway enterprise. have made Indonesia railways more active even though practically a single state-owned railway enterprise arrange the railway operation without within-railway competition. The impact of the railway reforms to it performance in each country is quietly has no different. the reforms in Indonesia railways. and the main operator presents daily operation. the government has intention to introduce within railway competition among operator. changed but did not result in a steady improvement. In general. In the Netherlands. the performance of passenger transport. measured in number of travel kilometers. But for freight transport in Netherlands it grew by approximately 50% in the remaining years of that decade. and expects the incumbent state-owned (NS) to compete with other transport mode (although only in the competitive tendering) making the most of its engineering and operational capabilities. and this is background of introducing vertical separation of the Netherlands. the growth 11 . and depots. forced by the change of the legal status and reorganization of the organization.Figure 12 Indonesia railway network in Sumatera Island Source: Indonesia Railway. Indonesian railways reforms is only for vertical separation. and state is responsible for it investment and maintenance. 2012 Conclusion Compared with the Netherlands. In the period 1990 .2003.
Anzir. T.Leeds. Lubis. EJRCE... Leijten M. Japan. Mulder. (2005) Privatising Railroads : The Problematic Involvement of the Private Sector in Two Dutch Railway Projects. (2009). the Netherlands. Ministry van Verkeer en Waterstraat. T. Dutch and Japanese Railway reforms and exchanges. NS Annual report 2010. Eerdmans D. M. freight transport by rail in Indonesia has not shown a strong market. the Netherlands. Westerink H. University of Groningen.. Sumi.(2005). PTEG (Passenger Transport Executive Group) Koppenjan J. (2012). Public transport tendering in the Netherlands. (2006).. ITB-UI. it only have 0. TRANSPORTATION AND MOBILITY IN THE NETHERLANDS .. Van de Velde. Didier. Dikun. Hans. Hermann C.. Delft University of Technology..M. Boodoo. An Analysis of Vertical Separation of Railways. Lijesen M..6 markets share for a whole transportation mode. I. (2008). UK Van Steen. This raising of performance in Dutch freight transport did not happen in Indonesia. Van de Velde. Paul J. Brandt T. Tendering and decentralization of regional rail passenger services in the netherlands. Indonesia..of freight transport is largely realised in international transport. 12 . Schulten. Delft.. Indonesian Rail Sector Reform: Challenges and Opportunities. Loughborough University. Vertical separation and competition in the Dutch rail industry A cost-benefit analysis.. Fumio. Sustaining Political and Financial Allocation as a Sustainable Approach in Transport Policy Development: The Case of Indonesia Railway during the Restructuring Process. References Kurosaki.. Liberalisation and privatization of public services and strategic options for European trade unions. An international comparison of railway organizational and planning frameworks.. (2010). Van dijk.. As a result. Muthohar. (2010). (2000). the relative importance of international transport in the Dutch freight railway industry has increased from 66% in 1990 to 78% in 2004. domestic freight transport increased by only a few percentages over the whole period.With a focus on Bicycles. (2006). Didier. Transfer. Germany. Harun Al-rasyid. Suyono. Driesen G. The University of Leeds. Japan. (2008).
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