Indonesia's Rail Expansion Outside Java Needs $74bn Investment

1 jam yang lalu

TEMPO.CO, Jakarta – Indonesia is aiming to expand its railway network beyond Java as part of efforts to strengthen national connectivity, with total investment needs estimated at Rp1,100 trillion to Rp1,200 trillion (around US$68–74 billion) through 2045.

Coordinating Minister for Infrastructure and Regional Development Agus Harimurti Yudhoyono said the plan covers both the construction of new lines and the reactivation of idle routes, adding roughly 14,000 kilometers of track across Sumatra, Kalimantan, and Sulawesi.

“The figures are substantial, but this is a long-term investment in Indonesia’s future. We cannot rely solely on the state budget,” Agus said in a written statement on Wednesday, April 22, 2026.

He noted that the project is part of President Prabowo Subianto’s national priority programs, particularly in infrastructure and connectivity. To meet the funding gap, the government is promoting alternative financing schemes, including partnerships with the private sector.

Agus said expanding rail networks outside Java is key to lowering logistics costs, reducing regional disparities, and improving economic competitiveness. Railways currently account for only around 4 percent of passenger transport and 1 percent of logistics nationwide.

“Rail transport offers efficiency and lower emissions. Its contribution to greenhouse gas emissions is less than 1 percent,” he said.

He also highlighted the imbalance between road and rail investment, saying a more proportionate approach is needed to achieve a sustainable national transport system.

According to Agus, each region presents distinct challenges. Sumatra requires upgrades to existing lines, Kalimantan needs entirely new networks, while Sulawesi’s development must be integrated with industrial zones and key commodities.

Analysts, however, warn of major hurdles. Deddy Herlambang, executive director of the Transportation Study Institute (Instran), said land acquisition remains a primary obstacle, particularly for new routes.

“Many of these projects involve new corridors, so land clearance is a major bottleneck,” he said.

He also stressed the need for rigorous environmental impact assessments to avoid conflicts with local communities, and cautioned the government to carefully structure financing given the scale of investment.

Meanwhile, Aditya Dwi Laksana of the Indonesian Transportation Society (MTI) said rail expansion outside Java is essential for more balanced development, but faces similar constraints in land procurement and funding.

He added that ensuring sufficient demand—from both passengers and freight—will be critical to prevent projects from stalling. Lessons from underperforming rail projects in Java, he said, should inform future planning.

“If public-private partnership schemes are used, the government must ensure clear and viable business calculations,” Aditya said.