Private Ownership to Join the Railway Business in Early 2007
Friday, 22 September, 2006 | 15:27 WIB

Tempo Interactive, Jakarta: Private ownership can join the railway business starting at the beginning of next year. This is in line with the agreement between the government and the House of Representatives (DPR) on Wednesday (20/9) to complete the Railway Bill by the end of this year at the latest.

“So in early 2007, the private sector and regional government can operate in the railway transportation service,” said Hatta Rajasa, Transportation Minister after lobbying the DPR Commission for Transportation in Jakarta.

National private ownership, said Hatta, is completely free to work in operating trains which so far has been carried out by PT Kereta Api. However, he went on, the regulation for foreign ownership still refers to the Capital Investment Decree, and that is, the ownership is limited to 49 years. “If regional government can establish a regionally-owned enterprise to do this business,” he said.

According to Hatta, the regional government will also have rights to procure the infrastructure of a new railway network in its territory by cooperating with the central government or foreign party. “This will make the business climate competitive and increase safety,” he said.

For the existing railway network infrastructure, Hatta said, it belongs to the government. All operators, both State-Owned Enterprises (SOEs) and private, which use the railway network will still be obliged to pay taxes to the government or the infrastructure maintenance operation.

On the other hand, the government will also give compensation to operators which carry out maintenance on the government’s infrastructure with funds or track accesses charges. “The sharing of infrastructure usage will be discussed with PT Kereta Api, that is,what will be good in sharing with the private sector,” he said.

Soemino Eko Saputro, Director General of Railways, is optimistic that private ownership is interested in this business. This is because railway routes have advantages in connecting city centers. Currently only foreign investors from France and China have been interested, while there is still no interest from domestic investors.

Anton Aprianto
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