Tuesday, July 16, 2024

KAI requests additional state capital injection for 2025

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State railway operator PT Kereta Api Indonesia (KAI) has proposed an additional State Capital Injection (PMN) of Rp1.8 trillion (US$110.6 million) for the next year to procure 24 new Electric Rail Train (KRL) sets from domestic sources to meet rising passenger demand and the need to replace aging trains.

KAI plans to acquire a total of 37 new train sets by 2027, which includes 24 domestic KRL sets, 11 sets from China, and 2 retrofitted sets, with a total budget requirement of Rp9.18 trillion.

“The urgency of this procurement arises from the fact that many of our current electric trains are over 30 years old, coupled with the rapid growth in passenger volume. The potential for overload is very high during peak hours,” Salusra Wijaya, KAI Director of Finance and Risk Management, told a hearing with Commission VI of the House of Representatives (DPR) on Tuesday, July 9, 2024.

Salusra highlighted that the benefits of procuring these KRLs are substantial, with a benefit-cost ratio of 4.8. This indicates that the societal benefits from the PMN will be nearly five times the expenditure.

Additionally, the return on investment to the economy from this procurement stands at 23.5 percent, significantly higher than the average economic return of 10 percent.

Earlier, KAI had requested a PMN of Rp2 trillion for the 2024 fiscal year for similar purposes. The entire PMN will be used for the rejuvenation of KCI’s train sets up to 2027.

Consequently, the total PMN requested by KAI for fleet rejuvenation amounts to Rp3.8 trillion, with additional funding to be sourced from bank loans.

Anne Purba, Vice President for Corporate Communications at PT Kereta Commuter Indonesia (KCI), said that all imported trains will arrive in Indonesia in the first half of 2025. This timing is crucial as KCI will retire 19 train sets this year due to the end of their service life.

“There will be a critical need for train sets from the second half of this year until the first half of next year. Therefore, the trains that are retired must be replaced with new ones by the first half of next year,” Anne told a DPR session on Monday, July 8, 2024.

Anne also noted that all imported trains will be sourced from CRRC Sifang Co. This decision aims to expedite production by eliminating the need for new designs.

KCI President Director, Asdo Artriviyanto, said that the new train procurement aligns with the projected needs of Greater Jakarta (Jabodetabek) Commuter Line users for 2024-2025, estimated at 1 million daily users. The daily passenger average in 2023 was 850,000.

The total number of Jabodetabek Commuter Line users was recorded at 290.89 million in 2023, a 38 percent increase from 239.25 million in 2022. Asdo projects an annual increase of 4 percent, or 16.98 million users, for the Jabodetabek Commuter Line.

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