Modernising the National Road Network Report

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Modernising the National RoadNetwork:

A Planning Framework to Improve Connectivity

and Development


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Modernising the National

Road Network:A Planning Framework toImprove Connectivity andDevelopment

CONSULTANT REPORT

November 2012


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INDONESIA INFRASTRUCTURE INITIATIVE

This document has been published by the Indonesia Infrastructure Initiative (IndII), an

Australian Government funded project designed to promote economic growth inIndonesia by enhancing the relevance, quality and quantum of infrastructure

investment.

The views expressed in this report do not necessarily reflect the views of the Australia

Indonesia Partnership or the Australian Government. Please direct any comments or

questions to the IndII Director, tel. +62 (21) 7278 0538, fax +62 (21) 7278 0539.

Website: www.indii.co.id.

ACKNOWLEDGEMENTS

This report has been prepared by William D. Paterson, Senior Policy Adviser, who was

engaged under the Indonesia Infrastructure Initiative (IndII), funded by AusAID, as part

of the Activity 248.

The support provided by Dir. Haris Butabara, Ir. Slamet Muljono and Dedy Gunawan

(Planning and Programming Division (Bipran), Directorate General of Highways), David

Foster, Philip Sayeg, Davey Kusmayadi and Max Antameng, and the guidance and

reviews by David Shelley, John Lee and David Ray are all gratefully acknowledged. The

report draws on consultantsreports prepared by AECOM Ltd. involving Robin Guess,

Chris Burley, Lindsay Shepherd and others. Any errors of fact or interpretation aresolely those of the author.

William D. Paterson

Jakarta, November 2012

IndII 2012

All original intellectual property contained within this document is the property of the Indonesia

Infrastructure Initiative (IndII). It can be used freely without attribution by consultants and IndII partners in

preparing IndII documents, reports designs and plans; it can also be used freely by other agencies or

organisations, provided attribution is given.

Every attempt has been made to ensure that referenced documents within this publication have been

correctly attributed. However, IndII would value being advised of any corrections required, or advice

concerning source documents and/ or updated data.

Cover Photo: Expressway network gives high connectivity for freight and passengers. Jakarta

Cikampek Toll Road, West Java. Photo by Timur Angin


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TABLE OF CONTENTS

ACRONYMS ............................................................................................................. V

EXECUTIVE SUMMARY ........................................................................................... VII

CHAPTER 1: NEED FOR A NEW APPROACH ON NATIONAL ROAD NETWORK

DEVELOPMENT ........................................................................................................ 1

1.1 FACILITATING INCLUSIVE NATIONAL DEVELOPMENT BY IMPROVED

CONNECTIVITY................................................................................ 1

1.2 CURRENT GOVERNMENT INITIATIVES AND OPPORTUNITIES........................ 4

1.3 SHAPING THE NATIONAL ROAD NETWORK TO SUPPORT ECONOMIC GOALS

AND GROWTH................................................................................ 6

1.4

INDIISTUDY ON ROAD NETWORK PLANNING......................................... 7

1.4.1 Approach and Results .............................................................. 7

1.5 THIS REPORT.................................................................................. 8

CHAPTER 2: CHALLENGE FOR NATIONAL CONNECTIVITY ........................................... 9

2.1 CONTEXT....................................................................................... 9

2.2 STRATEGIC CHALLENGES.................................................................. 11

2.2.1 Poor Trans-Regional and Metropolitan Travel Connectivity .. 11

2.2.2 Investment Planning and Programming Processes Can be

Improved ................................................................................ 14

2.2.3

Narrow Financing Base ........................................................... 16

2.2.4

Increasing Adverse Consequences of Road Use .................... 17

2.2.5

Organisational Capacity Improving Slowly ............................. 18

CHAPTER 3: DEVELOPMENTAL NEEDS ..................................................................... 19

3.1 PLANNING FRAMEWORK FOR ROAD NETWORK DEVELOPMENT................. 19

3.1.1 Improving Trans-Regional and Intra-island Connectivity ....... 19

3.1.2

Improving Metropolitan Urban Mobility ............................... 21

3.1.3

Input to MTEF and RENSTRA .................................................. 22

3.2 IMPROVEMENTS TO PLANNING PROCESSES AND POLICIES........................ 22

3.3 ORGANISATIONAL CAPACITY NEEDS................................................... 23

3.3.1

Strengthening DGH Planning .................................................. 23

3.3.2

Strengthening BPJT Feasibility and Delivery Functions.......... 23

3.3.3

Enhancing Supporting Policies and Mechanisms ................... 23

CHAPTER 4: PROPOSED FRAMEWORK FOR PLANNING DEVELOPMENT OF THE

NATIONAL ROAD NETWORK ................................................................................... 25

4.1 CURRENT NATIONAL MASTER-PLAN FOR ROAD INFRASTRUCTURE

DEVELOPMENT............................................................................. 26

4.2 INDIICORRIDOR PLANNING APPROACH.............................................. 28

4.3 ROAD RENEWAL STRATEGY.............................................................. 32


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4.4 FORECASTING FUNDING REQUIREMENTS AND OUTCOMES....................... 35

4.4.1

Forecasting Forward Funding Requirements ......................... 35

4.4.2

Forecasting Outcomes or Performance Indicators ................ 38

4.5

APPLYING THE PLANNING FRAMEWORK.............................................. 38

4.5.1

Steps in Applying the Planning Framework ........................... 39

CHAPTER 5: BUILDING CAPACITY ............................................................................ 44

5.1 DGH-BIPRAN ............................................................................. 44

5.1.1 Establishing Strategic Priorities and Supporting Changes to

Policy and Regulations ........................................................... 44

5.1.2 Planning of Expressway Network and Road Corridors ........... 45

5.1.3 Coordination and Roles of DGH and BPJT .............................. 45

5.2 BPJT .......................................................................................... 46

CHAPTER 6: CONCLUSIONS AND RECOMMENDED ACTIONS .................................... 48

ANNEXES ............................................................................................................... 52

ANNEXE 1: NATIONAL MASTER PLAN FOR ROAD INFRASTRUCTURE DEVELOPMENT52

ANNEXE 2: ECONOMIC AND FINANCIAL DATA ON PLANNED EXPRESSWAY

DEVELOPMENT IN SUMATERA EASTERN CORRIDOR AND JAVA NORTHERN

CORRIDOR. ........................................................................... 54

ANNEXE 3: GENERAL GUIDANCE ON PREPARATION OF ANATIONAL ROAD MASTER

PLAN................................................................................... 55

REFERENCES .......................................................................................................... 63


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LIST OF TABLES

Table 1. Current Low Connectivity in Economic Corridors ............................................. 13

Table 2: DGH Road Widening Program 2010-2014 and 2015-2024 Forecast ................. 27

Table 3: Estimates of Forward Funding Requirements for 2012-2029 from Planning

Analysis ............................................................................................................ 36

Table 4. Current Development in National Arterial Road Corridors of National

Masterplan ...................................................................................................... 52

Table 5. Economic and Financial data: Java North Corridor Expressway ....................... 54

Table 6. Economic and Financial data: Sumatra East Corridor Expressways .................. 54

LIST OF BOXES

Box 1. Current Road Classification .................................................................................. 10

Box 2: Summary of Steps for Preparing National Road Master Plan .............................. 42

LIST OF FIGURES

Figure 1: Expressway Development Implementation Plan Sumatera Eastern Road

Corridor .......................................................................................................... xii

Figure 2: Travel Time Outcome Forecasts from Corridor Plan Sumatera Eastern Road

Corridor .......................................................................................................... xii

Figure 3: Funding Requirement Forecasts from Corridor Plan - Sumatera Eastern Road

Corridor ......................................................................................................... xiii

Figure 4: Forecast of Average Annual Funding Requirements on National Roads 2015-

2029 ................................................................................................................ xv

Figure 5: Competitiveness in InfrastructureRegional Comparison ............................... 1

Figure 6: Priority Economic Corridors Defined in MP3EI Connectivity Strategy ............... 3

Figure 7: Extension of Toll Road Network Historical, Current and Planned

Implementation ................................................................................................ 5

Figure 8: Normalised Trip Times Estimated for Six Economic Corridors, 2012 .............. 12
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Figure 9: DGH Arterial Road Widening Program 2010-2014 .......................................... 26

Figure 10: Expressway Development Implementation Plan Sumatera Eastern Road

Corridor .......................................................................................................... 29

Figure 11: Capacity Expansion Profile - Staged Development in Parallel Facilities over

Long-term 20-year Period - Sumatera Eastern Corridor ................................ 29

Figure 12: Travel Time Outcome Forecasts from Corridor Planning Approach

Sumatera Eastern Road Corridor .................................................................... 30

Figure 13: Funding Requirement Forecasts from Corridor Plan - Sumatera Easter Road

Corridor .......................................................................................................... 31

Figure 14: A Road Renewal Strategy would Follow a Selected Long-term Alignment

Option ............................................................................................................. 33

Figure 15: Forecast of Average Annual Funding Requirements on National Roads 2015-2029 ................................................................................................................ 36

Figure 16: Example of Forecast Average Travel Time based on National Road

Development Plan 2015-2029 ........................................................................ 38

Figure 17. Expected Distribution of Width Standard on National Arterial Roads after

DGH 2010-14 Road Development Program ................................................... 53

Figure 18. Flowchart for Developing a National Road Master Plan ................................ 57
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ACRONYMS

ADB Asian Development Bank

AusAID Australian Agency for International Development

BAPPENAS Badan Perencanaan dan Pembangunan Nasional(National Agency for

Planning and Development)

BLU Badan Layanan Umum(General Service Agency)

BPJT Badan Pengatur Jalan Tol(Toll Road Regulatory Agency)

DGH Directorate General of Highways

GoI Government of Indonesia

IndII Indonesia Infrastructure Initiative

INPRES Presidential Instruction

IRMS Indonesian Road Management System

KEPPRES Presidential decree

KKBP

(CMEA)

Kementerian Koordinator Bidang Perekonomian(Coordinating Ministry

for Economic Affairs)

M&E Monitoring and Evaluation

MoF Ministry of Finance

MoT Ministry of Transportation

MPW Ministry of Public Works

MSOE Ministry of State-Owned Enterprises

MTEF Medium-Term Expenditure Framework (Kerangka Pengeluaran Jangka

Menengah)

MP3EI Masterplan Percepatan dan Perluasan Pembangunan Ekonomi Indonesia

(Master Plan for the Acceleration and Expansion of Indonesias Economic

Development)

PERPRES Presidential Regulation


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vi

PBB Performance-Based Budgeting (System)

PPP Public-Private Partnership

RENSTRA Rencana Strategis(Strategic Plan)

RPJM Rencana Pembangunan Jangka Menengah(Medium Term Development

Plan)

RPJP Rencana Pembangunan Jangka Panjang(Long Term Development Plan)

RPN

VGF

Rencana Pembangunan Nasional(National Development Plan)

Viability Gap Funding


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EXECUTIVE SUMMARY

Indonesias trade competitiveness and future growth prospects depend on strongaction to improve connectivity between economic centres. This report outlines a new

framework for modernising the national road network to achieve this. It requires a

strategic shift in funding priority from asset preservation to capacity investment to

underpin the coming medium-term strategy (RENSTRA), a change in public and private

funding modality, and greater accountability for performance against national targets

for connectivity and mobility.

The Challenges

Indonesia ranks below the medians for ASEAN and developing Asia in terms of road

infrastructure in the Global Competitiveness Indices. The slow development of

expressways and the low capacity of the arterial network in response to rapidly rising

traffic demand are the two main reasons why average trip times between major

centres are nearly double those of key neighbouring countries: 2-4 hours/100 km

compared to 1.0-1.5 hrs/100 km in Malaysia, Thailand and China.

The Master Plan for the Acceleration and Expansion of Indonesias Economic

Development (MP3EI1), which focuses on six priority economic corridors

2, provides a

framework for prioritising and coordinating multi-sectoral investments in inter-regional

and local connectivity. For roads this implies high-capacity, high-speed inter-regional

connections between main centres and good local connectivity with feeder markets

and production centres. This framework covers two high-productivity corridors (Java

and Sumatera), two rapid-growth corridors (Kalimantan and Sulawesi) and the two

eastern island groups with sparse development and many marine or missing links (Bali-

Nusa Tenggara and Papua-Maluku).

Connectivity has not been a priority in recent network planning and current standards

show a huge backlog of investment in national road capacity. Corridor travel times are

more than a day (26 hours) on Java, more than two days on Sumatera, Sulawesi and

Bali-Nusa Tenggara, and over three days on Kalimantan (Pontianak-Samarinda) and in

Papua-Maluku. In the north Java and east Sumatera corridors, designated as trunk

routes by the Directorate General of Highways (DGH), widening to four-lane highways

has raised average travel speeds to 50 km/hr, but on most other arterial roads the

average speeds are typically 40 km/hr or less. Where roads are widened, traffic flow isusually impeded by low geometric standards, dense roadside land-use and slow-

moving heavy vehicles.

1Masterplan Percepetan dan Perluasan Pembangunan Ekonomi Indonesia (MP3EI),

Coordinating Ministry for Economic Affairs (CMEA) 2011.2Sumatera (Aceh to Lampung plus three transverse connectors), Java (Serang-Jakarta-Surabaya

and Semarang-Jogyakarta-Banyuwangi), Kalimantan (Pontianak-Banjarmasin-Samarinda),

Sulawesi (Makassar-Mamuju-Kendari-Palu-Gorontalo-Manado), Bali-Nusa Tenggara, and

Papua-Maluku-Merauke.


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viii

In the past two decades, road planning has followed a two-track approach. For the

main national arterial and collector road network (38,000 km in total length) the

investment priority of the past two strategic plans (RENSTRA 2005-09, 2010-14) has

been asset preservation and road condition targets (86 percent stable by 2009, 94percent stable by 2014). Budget allocations for network development have been of

secondary priority and have gone into four-laning on parts of selected trunk routes and

minor widening or improvement to intermediate standards on other arterial routes,

especially in the current period 2010-14. Even so, trip speeds and safety improvements

have been marginal due to low geometric improvement and short-term focus of the

planning process.

The second track of road planning has relied on private sector finance to construct toll

roads under private-sector concessions. Of the nearly 3,000 km of expressways

needed, only 700 km are in operation and a further planned 946 km have been delayed

by a combination of concession financing failures, land acquisition delays and a slow-down in private-sector interest. DGH has identified future expressways in several main

corridors, but the process for determining their feasibility and the capacity of the Toll

Road Regulatory Agency (BPJT) in preparing them for market have been hampered by

their low financial viability, problems of land acquisition and an inappropriate risk

allocation in the concessioning framework.

Public spending on national roads could deliver better value for money. Road condition

has been deteriorating rapidly and is the subject of public complaints and demands

from DGH for increased funding for road preservation. The 2010 IndII study on

medium-term expenditure planning, which included an evaluation of the performance

of past and current programs, identified key areas where improvements were needed.It found that overall life-cycle costs of road and bridge assets were higher than

technically necessary or economically optimal leading to an inefficient use of funds

and strain on the road budget. The reasons included:

In regard to program delivery: (i) short asset life arising from low design standards

and premature deterioration, and issues in project preparation, vehicle

overloading, construction industry incentives and project management; (ii) high

project costs arising from inefficient procurement, including fragmentation of

projects, weak market competition and corruption; and (iii) weak project

management with greater priority given to budget execution than staff capability

and performance.

In regard to network development and capital investment: (i) short-term and costly

capacity improvements including marginal widening of existing roads and not

addressing longer-term functional requirements of alignment, right-of-way and

safety; (ii) unresolved spatial planning and land issues, including land acquisition

and access control; and (iii) lack of high-capacity connections between regions and

growth centres and a conflict of investment priorities between expressways and

other roads in primary corridors.


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Current Opportunities

Large increases in the national road budget over recent years have meant that

substantial funding is now available for investment in road development. With a six-fold increase in the seven years since 2005 (the budget averages IDR 30 trillion/yr in

the current RENSTRA) the funding needs for asset preservation are amply covered and

substantial funding could become available for investment in network development.

The preparation in 2013 of the RENSTRA 2015-19 provides an opportunity to shift the

priority from preservation to network development.

The modernisation of government systems, through medium-term expenditure

planning, performance budgeting and administrative reform, allows more room for

major multi-year programs and for tying spending performance to strategic targets

such as connectivity that have impact on economic growth.

Expressway development is starting to revive after a long hiatus, a new legislation

resolving land acquisition delays has been passed and the framework for private sector

investment and Public Private Partnerships (PPPs) is gradually improving. After a

decade of renegotiation and restructuring, many stalled toll road projects are now

under implementation and other planned projects are under preparation. This is

bringing pressure on the capacity of BPJT, the Toll Road Regulatory Agency, to manage

the delivery of an accelerated program and makes it timely to consider changes to its

functional role. The Law no. 2/2012 on public land acquisition3 and implementing

regulations provides for land acquisition for national roads to be undertaken by the

national government instead of local governments, reducing the risk on private

investors and accelerating the processes of consultation and compensation. Newattention to managing the risk profile in PPPs and to mechanisms such as Viability Gap

Funding (VGF) to support projects that have low financial viability is intended to attract

greater private sector investment.

Identifying a Way Forward

Following its 2010 study, IndII supported a study in 2011 on the planning framework

and investments needed to modernise the national road network to achieve national

connectivity goals. The challenges to improving road connectivity include:

The demand for road transport is high and rising rapidly. Over 70 percent of freight

and 82 percent of passenger travel are carried by road transport. The roadtransport fleet doubled from 41 to 80 million vehicles in the five years from 2004

to 2009. Within this, motorcycles increased fastest and accounted for 75 percent of

all vehicles in 2009. With current motorisation still comparatively low (at 70

vehicles per thousand population excluding two-wheelers) and with rising income,

the fleet is expected to continue growing at about 10 percent per year.

3 Law no. 2 of 2012 on Acquisition of Land for Development in the Public Interest and

Presidential Regulation no. 71 of 2012 on the Implementation of Land Acquisition for

Development in the Public Interest


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x

Road density and capacity is low compared with neighbouring countries, and the

expressway network density is considerably lower. The national road network,

comprising about 8 percent of the total network length of 477,000 km, is being

expanded by about 5 percent/year in road space (lane-km) and extended also byabout 5 percent/year in length through the construction of strategic roads in

remote areas and reclassification of other roads. The expressway network density

is less than a tenth of that in Malaysia, China and Philippines. A third of all vehicle

travel is carried by the national road network, but low geometric standards in hilly

terrain and encroachment from roadside development cause travel speeds to

average only 40-50 km/hour on the main arterials. Road safety is poor with over

30,000 fatalities/year, twice that of neighbouring Malaysia.

Trans-regional and metropolitan connectivity is poor and not monitored. Most

vehicle travel is concentrated in urban areas where speeds are generally very low.

On inter-urban national roads the

average travel speed was about

40 km/hour in 2005, but might be

closer to 50 km/hour where there

has been widening to four lanes;

elsewhere, conditions will have

deteriorated. Together with the

lack of distance reductions

brought by new alignments, these

low speeds result in connectivity

performance of only 50-60

percent of that of major

neighbours. However these travel

time data are not yet regularly

surveyed, reported or used in

planning targets.

The restriction of expressway development to toll roads financed only by the

private sector, along with other factors, has limited the delivery of a high-capacity

network. Expressway length has increased by less than 10 km/year over the past

two decades compared with a need in excess of 100 km/year. The focus on the

financing modality rather than functional standards has led to a large backlog in

expressway capacity and to distorted and conflicting investments in key economic

corridors. There is a need to introduce a formal functional classification forexpressways, address a broader range of financing options that facilitate a higher

share of public funding, and improve the planning and administration of a national

expressway network.

Road spending priorities need to be linked more directly with national

development goals. The strategic targets of previous RENSTRAs have focused on

asset condition but not network function and connectivity. Appropriate

performance indicators need to be defined for connectivity and appropriate

planning procedures developed to allow achievement of connectivity goals to be

demonstrated.

Inadequate capacity for heavy mixed traffic

slows travel and raises safety risks. NR14

Semarang. Photo by Phillip Jordan


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xi

Proposed Framework for Planning Development of the National Road Network

A new framework is proposed to produce and update DGHs national masterplan for

road infrastructure. The framework would provide an outcome-oriented, analyticalbasis to address the challenges identified for the primary network, feeding directly into

the funding requirements for the medium- and long-term plans, and defining outcome

targets for connectivity. There are two key elements in the proposed framework.

A Long-term Road Corridor Plan is the key tool of the proposed planning framework. It

would be used to optimise road infrastructure and investment in each of the main

MP3EI economic corridors over a multi-year timeframe. The corridor plan for each

corridor would provide:

A strategy for developing the optimal road infrastructure arterial road and

expressway standards and phasing - needed over a 50-year horizon. This will

prioritise investment in both the existing arterial network and the emerging

expressway network over the coming 20-year period.

A pipeline of investment projects for successive five-year periods, staged to

optimise functional benefits and spread funding requirements, and identifying

bankable projects for PPP delivery.

Evaluation of the infrastructure standards and the connectivity delivered in terms

of measurable journey times, which will allow performance targets to be linked to

the capital investment plan.

A focus on the location and staging of the expressway network that would form the

backbone of trans-regional connectivity, with staged implementation. An optimised approach to raising the arterial roads in the corridor to modern

highway standards, including realignment and renewal of the road structure,

reduced annual costs, reduced social and environmental impacts and greater

benefits than the present incremental approach.

A Road Renewal Strategy would supplement the Corridor Plans. It would provide

criteria for upgrading the arterial and primary collector roads in the national road

network to modern geometric and structural standards able to support smooth safe

travel and freight with low maintenance. This strategy would improve local

connectivity, extend road life, and make more effective use of funds over the long

term than the current incremental approach to betterment and widening. With stagingby successive five-year periods over 20 years, it would support the preparation of

RENSTRA plans and funding estimates.

Together the medium-term Corridor Plans and Road Renewal Strategy would

complement the asset preservation programs but would take precedence on individual

links in order to ensure that funds for asset preservation were not wasted in conflict

with scheduled development investments.


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xii

Illustration of Road Corridor Plans

Examples of the corridor planning approach were prepared for the Sumatera eastern

road corridor and the north Java corridor, using existing study data.

The corridor plan generates four types of output:

1. A road development implementation plan showing the long-term schedule over

about 25 years and the timing for each road segment of project preparation, land

acquisition and construction activities. In the example illustrated in Figure 1, the

activities for developing seven expressway segments in the eastern corridor and

lateral corridors are shown over five successive 5-year plans from 2012 to 2030. A

parallel long-term schedule would show the development of the arterial roads in

the corridor.

Figure 1: Expressway Development Implementation Plan

Sumatera Eastern Road Corridor

2. A strip-map of road asset standards in the corridor, depicting the width and length

of each section of the road assets (arterial and expressway), colour-coded for the

5-year period in which it would be opened. An example is shown in the main report

in Figure 6. In this case, the plan shows the arterial road being improved to a

minimum 7 m width standard over the full length of 2,536 km by 2027, with

segments near Pekanbaru and

Medan widened to four-lanes.

The parallel expressway with a

four-lane dual carriageway

standard would be opened in

stages between 2020 and 2030,

with a total length of 2,014 km

a distance reduction of 20.6

percent.

3. A travel time chart showing the

estimated travel times between

key nodes along the corridor at

the end of each 5-year period. In

the above example, the

reduction in travel times varies

by segment and period and

results in a reduction in travel time from Palembang to Medan from 37 hours to 15

>2029

North-South segments

Bakauheni-Palembang

Pekanbaru-Medan

Palembang-Pekanbaru

Medan-Aceh

East-West connectors

Pekanbaru-Padang

Palembang-Bengkulu

Tebing Tinggi-Sibolga

Legend

Project preparation

Land acquisition

Construction

2010-14 2015-19 2020-24 2025-29

Figure 2: Travel Time Outcome Forecasts from

Corridor PlanSumatera Eastern Road Corridor

11 95 5 5

20

16

148 8

17

14

10

7 7

18

16

15

13

6

0

10

20

30

40

50

60

70

2009 2014 2019 2024 2029

Traveltimefrom

Lampung,

hour

s

RENSTRA End-year

B Aceh

Medan

Pekanbaru

Palembang

Lampung

Total traveltime Lampung to B Aceh, hr54

45

66

25

33


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xiii

hours by 2024, and for the overall trip from Bandar Lampung to Bandar Aceh from

66 hours to 25 hours by 2030, as shown in Figure 2.

4. Multi-year funding requirements,

showing the funding

requirements by annual or 5-year

periods, disaggregated by budget

line. For the above example, the

funding required for expressway

development, arterial road

development, and arterial road

preservation is shown in Figure

3(a) and the funding source

(public and private based on

financial viability) in Figure 3(b)

indicating total requirements of

IDR 12.5, 61.0, 66.6 and 78.2

trillion in the periods from 2012

to 2029. It is notable that, in this

example, the financially viable

private sector investment

amounts to only IDR 8.5 trillion

or 4 percent of the IDR 218

trillion required over the 17 year

period. Thus the PPP schemes

would need to be designed to

facilitate substantial portions of

public funding through either

VGF or a life-cycle/annuity

mechanism.

Applying the Road Renewal Strategy

Even when present plans for expressway development are complete, reaching about

4,000 km by 2029, the expressway network would make up only about ten percent of

the national road network and then mainly in the most heavily trafficked corridors in

the west.

The road renewal strategy would provide the long-term planning framework for

progressively upgrading the arterial road network to modern standards and lowering

annual costs. Arterial roads would be upgraded to modern standards, section by

section, at an appropriate time according to the priorities within the network and

region. The existing road would be replaced by new construction or reconstruction,

with modern alignment and cross-section. The renewed road would have a long

expected life of 20 years or more, lower preservation costs, better safety, and a strong

foundation to support future strengthening for growth in traffic loads. This would

result in lower overall annualised costs, despite a higher initial cost.

Figure 3: Funding Requirement Forecasts from

Corridor Plan - Sumatera Eastern Road Corridor

2012-14 2015-19 2020-24 2025-29

Expresswaydevelopment, E

2.613 54.866 61.451 73.866

Arterial road

development, E7.634 2.287 0.865 0.415

Arterial road

preservation, E2.238 3.872 3.872 3.872

0

10

20

30

40

50

60

70

80

Fundingrequirement,IDRtrillion

2012-14 2015-19 2020-24 2025-29

Public sector 12.5 54.0 64.6 78.2

Private sector 0.0 7.0 1.5 0.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

Fund

ingSources,

IDR

trillion


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xiv

Road renewal would provide the opportunity for adopting the appropriate road

alignment for the long-term. The alignment would be designed for a 25-50 year period,

including provision for appropriate right-of-way. The appropriate alignment may be in

the existing location but in some cases may smooth the curvature to improve flow andsafety, or be relocated to take account of spatial plans, geotechnical or environmental

risks, or to reduce trip distance. While land acquisition requirements may be

substantial, a one-off upfront action may be a suitable trade-off that can avoid the

need for future repeated social disruption and higher costs.

In budgetary and financial terms, road renewal may cost more than the current

incremental widening strategy in terms of initial cost, but would be less than the

current spending when annualised over 5-20 years. The current costs of widening and

road renewal (to full 7 m width on 12 m foundation) are IDR 2-3 billion/km and IDR 5

billion/km respectively. With future preservation needs reducing to IDR 100-150

million/km/year, the simple annualised costs including initial development andsubsequent preservation amount to IDR 300-350 million/km/year over 20 years. This is

about half the current spending of IDR 700 million/km/year (after excluding non-

pavement expenditures). Annual spending of IDR 5-10 trillion/year would fund renewal

of 1,000-2,000 km of national road each year and would modernise the arterial road

network of 30,000 km in 15-25 years.

Forecasting Funding Requirements and Outcomes

The power of the proposed planning framework becomes still more evident through

the long-term forecasting of forward funding requirements and outcomes for all

national roads. Combining the outputs of the corridor plans and the road renewalplans, the framework is able to generate forecasts of funding requirements for the

entire national road network, linked to spending timeframe and to performance in

terms of travel time and accessibility.

Using the IndII study example for demonstration purposes, and applying the renewal

strategy over the 15-year period 2015-2029, the following scenario resulted: (i)

expressway construction of 3,700 km (including north Java, east Sumatera and laterals,

and 300 km in other corridors); (ii) road renewal applied to 30,300 km of arterial roads

beginning with trunk road corridors of 8,700 km; and (iii) reducing the cost of road

preservation from IDR 300 million/km/year to IDR 150 million/km/year after road

renewal.

The forecast national road funding requirements for this scenario are shown in Figure 4

(see also Table 3 in the report): annual public funding requirements would need to rise

by 64 percent overall (from the present IDR 32 trillion/year to about IDR 48

trillion/year in the next 2015-19 RENSTRA and to about IDR 56 trillion/year in 2020-24)

before falling again after 2025. These illustrative results probably represent an upper

limit and of course could be spread to provide more uniform levels of funding.


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Figure 4: Forecast of Average Annual Funding Requirements on National Roads 2015-2029

Three observations stand out: Most of the increased funding would be needed for expressway development,

requiring IDR 360 trillion of funding over 15 years over the period 2015-24.

However only a sixth (IDR 60 trillion) of this is likely to attract private sector

investment due to the low or marginal financial viability of many packages outside

the north Java corridor. Thus it will be imperative to find PPP mechanisms which

facilitate substantial public funding contributions in the order of IDR 300 trillion.

VGF mechanisms which involve upfront transfers could result in demands for

public funding of up to IDR 27 trillion/year in 2020-24 as seen in the figure above.

Others, such as annuity or lifecycle mechanisms, which spread the public payments

over a long period such as 30 years, would reduce the demand for public funding to

about IDR 10 trillion per year as well as producing more reliable outcomes.

Development to modernise the arterial road network would require about IDR 19

trillion/year to be completed within the 15 year period, with two-thirds spent on

road renewal and one third on bridges and other needs.

The funding requirement for asset preservation begins at the existing level but

would decline as the arterial road network becomes modernised with more

durable performance and lower preservation costs.

Lastly, forecast average travel times in the main corridors (hr/100 km) over the 15-year

period could be generated and presented either as a national average or disaggregated

by region or corridor (e.g., see figure 11 in the main report).

Applying the Framework and Building Planning Capacity

In this report, guidance is provided on the following nine steps involved in preparing a

national road master plan using the framework: identifying the priority economic

corridors; defining the road corridors and their priorities; specifying the levels of

service; adopting appropriate design standards; defining the national expressway and

highway network and supporting access roads; identifying connections between

economic corridors; preparing the corridor development plans; developing a 20-year

budget and financing plan for each road corridor; and preparing the initial priority

projects for implementation.

0

10

20

30

40

50

60

70

2005-09 2010-14 2015-19 2020-24 2025-29

AnnualFundingRequirement,

IDRtrillion(2011prices)

Expressway -private funding

Expressway -public funding

Arterial road development

Road preservation

Road management


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Findings and Recommendations

In adopting the proposed framework, DGH would have a rigorous basis for evaluating

alternative spending strategies and development targets, serving as a basis forpreparing medium- and long-term expenditure strategies for national roads. The two

elements of the framework individual long-term corridor plans and a road renewal

strategy would provide the basis for evaluating the physical outputs, funding

requirements and performance outcomes of various scenarios.

A preliminary demonstration of the framework has quantified the large backlog in

capacity development of the national road network. Public spending on national roads

would need to rise by 66 percent from the present IDR 30 trillion/year to an average of

IDR 49 trillion/year over the 15-year period remaining in the current long-term plan

(RPJN). All the increase would need to be allocated to road development, raising its

allocation to about 80 percent of the total.

An investment of IDR 638 trillion (in 2011 prices) in road development would be

needed to improve connectivity by over 40 percent in terms of average travel times,

especially in the priority economic corridors, over the fifteen year period 2015-29. A

little over half of this, IDR 360 trillion, would be required to build 3,700 km of

expressway connecting the countrys main economic corridors, of which about one

sixth is likely to attract private sector investment and about IDR 300 trillion is to be

provided through public funding mechanisms. The remaining IDR 278 trillion would be

invested in the renewal of 25,000 km of arterial roads and improvements to bridges

and other national roads.

The following actions are recommended for implementing the proposed planning

framework:

Road network development needs to become the strategic priority for DGH,

requiring a proactive and long-term approach, with road preservation taking a

secondary role.

Revisions will need to be made to some policies, regulations and laws to reflect and

support the shift in strategic priority and the modernisation of the national road

network.

A formal plan for road corridors, incorporating trunk routes and arterial routes,

should be defined in relation to the national spatial plan.

An expressway network should be defined as an identifiable network within

national roads, separate from arterial roads.

An initial long-term master plan for national road infrastructure should be

prepared to serve as the basis for preparation of the 2015-19 RENSTRA.

The preparation of road corridor plans for prioritised corridors should be

developed as a DGH procedure, based on the example provided in this report and

supporting documents.


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Outcome indicators - such as road transport demand, travel times and distances for

the corridor need formal definition and inclusion in the strategic targets of

spending plans.

A multi-year schedule (of 15-25 years) of unconstrained funding requirements

should be prepared for each corridor, as well as a multi-year financing plan.

A long-term development and expenditure plan for the national road network,

together with forecasts of key outcome indicators, should be prepared for a range

of funding scenarios.

PPP mechanisms which facilitate substantial public funding contributions

distributed over extended periods such as annuity or lifecycle delivery

mechanismsneed to be defined and authorised among the options for delivering

VGF and reducing risk (this would be attractive for investors and lead to more

reliable outcomes).

Managerial and technical capacity in the Planning and Programming Division(Bipran), DGH should be enhanced for national road development planning using

this framework.

BPJTs managerial and technical capacity should be strengthened to expedite

delivery of a high-capacity expressway network.

The issues raised by this report are far-reaching and have significant implications for

the setting of spending strategies and performance targets for development and

expansion of the national road network in the future.

Road renewal gives improved travel speed and safety and extended

asset life. Coastal Road, Aceh; Photo by Timur Angin


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FRAMEWORK FOR PLANNING

DEVELOPMENT OF THE NATIONAL

ROAD NETWORK: EXECUTIVE

REPORT

1

CHAPTER 1: NEED FOR A NEW APPROACH ON

NATIONAL ROAD NETWORK

DEVELOPMENT

CHAPTER 1: NEED FOR A NEW APPROACH ON NATIONAL

ROAD NETWORK DEVELOPMENT

1.1 FACILITATING INCLUSIVE NATIONAL DEVELOPMENT BY IMPROVED

CONNECTIVITY

Indonesias economic competitiveness

depends to a significant degree on

adequate infrastructure supporting its

connectivity internally between

economic centres and externally to its

markets. Growing signs that a lag in the

provision of infrastructure is impingingon economic growth and

competitiveness therefore are a cause

for concern. Thus the new national plan

for expansion of key economic corridors

(MP3EI) and a call for a dramatic shift in

the way that development of the

national road network is planned and

managed are important matters for

those responsible for funding and

delivering national road infrastructure.

Indonesias connectivity and logistics

performance is deteriorating.

Indonesias trade depends not only on

efficient linkages between sea ports and

airports and its international markets but

also on good land-side connectivity to its

agricultural regions, resource base and

manufacturing centres. The land-side

connectivity between port and

hinterland in East Asia accounts for over

half of the logistics cost for goods boundfor international markets, according to

ADB et al. (2005). The situation appears

to be more critical in Indonesia. The

nations logistic performance

deteriorated during the period 2007 to

2011 from an overall rating of 3.01 out of

5 falling to 2.76, according to the World

Banks Logistics Performance Index

(World Bank 2010), with poor

infrastructure a key reason for the

Figure 5: Competitiveness in

InfrastructureRegional Comparison

(a)

Road Infrastructure indicator (GCI

2011)

(b)Access to Expressway Network

(c)

Estimated trip times in main corridors

Sources: (a) Global Competitiveness Indices

(2011); (b) DGH data and World Development

Indicators 2008 analysed by Shimizu, JICA

(2009); (c) IndII study estimates based onsample bus schedule and road corridor data,

2011.

0 2 4 6 8

GCI - Road Infrastructure Indicator

Developing As ia

ASEAN

Indonesia

China

Thailand

Malaysia

Singapore

0 0.2 0.4 0.6 0.8

Expressway Density (km/1000 pop.)

Malaysia

China

Philippines

Thailand

Indonesia

Vietnam

INDONESIA

0.00 1.00 2.00 3.00

Trip time (hr/100 km)

Vietnam

Indonesia

China

Thailand

Malaysia


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2




REPORT

decline. Indonesia is also falling behind comparable countries in the region such as

Malaysia, Thailand, Philippines and Vietnam that have either maintained or improved

their performance.

Indonesias competitiveness is also being impacted by the availability and quality of

its infrastructure. In ratings of global competitiveness, Indonesias ratings continue to

reflect a lack in the availability and quality of infrastructure, despite recent

improvements due to non-infrastructure factors4, refer to Figure 5. In the region, the

nation, with a score of 3.5 out of 10, ranks below the median of 4.3 for ASEAN

countries and considerably lower than neighbours such as Thailand and Malaysia, as

seen in Figure 5(a). Rapid growth in demand, the low penetration of expressways (10-

40 percent of the levels in the region (refer to Figure 5(b)), and rising congestion on the

nations highways contribute to poor logistics performance. Indonesia also has to deal

with the additional burden of significant urban congestion, not only in the Jakarta

conurbation but also in the other six metropolitan centres, such as Surabaya andMedan, where the key airports, seaports and industrial areas are located. As a result,

average travel times in the main corridors, a key factor in transport costs and logistical

competitiveness, appear to be significantly longer than in neighbouring countries, as

seen in Figure 5(c).

In this context, the national master plan for development in key economic corridors is

a crucially important initiative. The MP3EI5, issued by the Coordinating Ministry for

Economic Affairs (CMEA) in May 2011, focuses on strengthening connectivity to

integrate the growth centres and ports in the nations key economic corridors, as

shown in Figure 6. Improved connectivity is fundamental to catalysing development

and to integrate the more remote regions outside Java and Sumatera into the nationaleconomy.

The six identified economic corridors6are:

Sumatera Banda Aceh to Bandar Lampung with transverse connections to key

centres and to Java

Java Serang linking to Jakarta and Surabaya, and Semarang connecting to

Jogyakarta and Banyuwangi

KalimantanPontianak linking to Palangkaraya, Banjarmasin, and Samarinda

SulawesiMakassar linking to Mamuju, Kendari, Palu, Gorontalo, and Manado

4 In 2010 Indonesia was ranked at 44th position (out of 133 countries) by the Global

Competitiveness Index (GCI). This was an improvement from 54th position in 2009. But in

terms of infrastructure performance Indonesia was ranked at 82nd position. The index

comprises 12 pillars of which infrastructureis only one.5Masterplan Percepatan dan Perluasan Pembangunan Ekonomi Indonesia (MP3EI).

6 Each economic corridor includes smaller sub-corridors where investment in the supporting

roads should also be identified and prioritised. In this report the sub-corridors are considered

to be part of the road corridor.


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Balilinking to Nusa Tenggara

Papua Malaku - Merauke linking to Jayapura, Manokwari, Sorong, Sofiti and

Ambon

Public expenditure in the road sector could have stronger linkage to national economic

development goals, and trans-regional connectivity should become a strategic priority

for the DGH. A recent review and study supporting the implementation of a Medium-

Term Expenditure Framework (MTEF) and Performance-Based Budgeting (PBB) in theroad sector was undertaken in collaboration between DGH and IndII

7. Among a

broader set of recommendations, the review found that the existing approach to

planning and implementing capacity expansion on the national road network was not

delivering a modern high performance network that could meet current and future

needs because it lacked a focus on connectivity and logistical performance. It also

found that funding allocated to road development could be used more efficiently and

effectively with more attention to long-run life-cycle costing. Given the substantial

increase in Government funding, which has increased six-fold in the current RENSTRA

compared with 20058, higher priority should be given to the development of modern

safe highways in the main economic corridors and to support for a trans-regional

network of expressways (tolled or untolled) to provide high speed and safe travel withlimited access.

7 Expenditure Planning and Performance-based Budgeting in the Directorate-General of

Highways. Indonesia Infrastructure Initiative (IndII), March 2010.8 From IDR 5.3 trillion in 2005 to an average of IDR 29.6 trillion in the 2010-14 RENSTRA for

DGH.

Figure 6: Priority Economic Corridors Defined in MP3EI Connectivity Strategy

Source: MP3EI, Coordinating Ministry for Economic Affairs (2011)


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1.2 CURRENT GOVERNMENT INITIATIVES AND OPPORTUNITIES

Focusing on a new framework for network planning is timely especially in the context

of a number of important parallel initiatives, including:

Modernisation of the bureaucracy through new organisational structures,

performance measurement, accountability and remuneration in a government-

wide program (reformasi birokrasi).

New approach to government budgeting through the implementation of the MTEF

in MPW, involving rolling three-year expenditure programs, and PBB, which links

accountability for achieving performance targets to the relevant agencies and work

units9.

Progress in accelerating expressway development. After several years of

renegotiation and restructuring, 24 toll road construction projects that have been

stalled for about ten years are now proceeding. As a result, about 946 km are

under implementation and due to open for operation between 2013 and 2017,

according to present plans. Other new toll road projects are also under

preparation, so the pace of implementation is set to accelerate, as shown in Figure

7. This implies considerable pressure on capacity to manage the delivery process,

to minimise delays and provide adequate financing. Thus it is timely also to

consider the functional role of BPJT and the appropriate administration of the

expressways, in addition to their financing modality.

Land acquisition problems are being overcome. A revolving fund in place since

2007 and the new Law no. 2/201210

on the acquisition of land in the public interest

are addressing the prevailing issues. The law provides for land acquisition fornational roads to be the responsibility of the national rather than local

government, for disclosure and consultation to be completed within 90 days and

for the full process of consultations, business and legal procedures to be

completed within a total of 436 days at the latest. While this will pose challenges, it

is moving in the right direction. Past PPP projects have experienced major

difficulties where the private party was given responsibility for land acquisition but

not control of the process, which resulted in implementation delays or stoppages.

Guidelines on new models for facilitating private sector participation in toll roads,

including PPPs and the provision of public financing, are available but urgently

need to be expanded and demonstrated. The new guidelines recognise the

importance of the risk profile and financial viability of the facility, and provide aframework for public financial support of those projects which are not viable for

private financing alone. However, suitable mechanisms for the provision of the

9IndII support to DGH has assisted the application of MTEF-PBB in the road sector, giving rise to

this and related studies on improving the performance of public expenditures in the road

sector.10

Law no. 2 of 2012 on Acquisition of Land for Development in the Public Interest and

Presidential Regulation no. 71 of 2012 on the Implementation of Land Acquisition for

Development in the Public Interest


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public funding contribution need to be established and utilised because timely

execution of the planned expressway program will depend on it. Public funding

models which place the risk for factors that the private developer cannot control

(such as land, resettlement and revenue) on the government, and which providefor regular payments (e.g. quarterly) by the government to the developer based on

various criteria, are likely to provide the most stable basis for financing the large

program. As this report will show, successful execution of the planned expressway

program shown in Figure 7 will require government funding of more than 80

percent of the total cost in order to gain strong private sector participation.

Figure 7: Extension of Toll Road Network Historical, Current and Planned Implementation

Source: Data from BPJT as of October 2011, chart by IndII assuming 150-200 km/year

delivery of Planned program.

The national road budget has risen steeply, nearly six-fold in the past six years,

leading to an expanded program. The spending rose from IDR 5.3 trillion in 2005 to

IDR 29.8 trillion (AUD 3.2 billion) in 2011, and the economy is growing. Public

funding for development is thus no longer the constraint it used to be, and

provided there is strategic direction to the allocation for investment in network

development, the connectivity goals can be achievable. However, in allocating

almost twice the budget from IDR 16 trillion/year in 2009 to the average of IDR 30

trillion/year for the period 2010-2014, DGH lacked a long-term plan with

connectivity targets and a pipeline of development projects. The allocation of the

majority of the budget (i.e., 63 percent or IDR 19 trillion/year) to road

development was instead based on policies that had only limited strategic focus

and were largely short-term in their impact. The strategic elements included, for

example, the widening of existing roads in trunk road corridors, and improving

strategic roads (non-national roads being reclassified) in remote and under-

developed areas. However much of the funding was widely dispersed for minor

and incremental widening of other national roads to normative width standards

without optimising long-term requirements. The policies delivered short-term and

marginal improvements rather than long-term substantial improvements to

capacity and connectivity.

Preparation of the next RENSTRA during 2013-14 provides the opportunity for

adjusting the strategic focus of spending on national roads and its linkage to

0

500

1000

1500

2000

2500

3000

3500

1980 1990 2000 2010 2020 2030

Totallength,

km

Operational Implementing Planned


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connectivity. Preparation of the 2015-19 RENSTRA by DGH begins in January 2013.

The RENSTRA establishes the medium-term strategic priorities for the sector and

the allocation of funding across the five-year period. This is the third period of four

within the long-term period 2005-2024 and is crucial for converging on the long-term goals for connectivity and capacity development of the road network.

1.3 SHAPING THE NATIONAL ROAD NETWORK TO SUPPORT ECONOMIC GOALS

AND GROWTH

What type and shape of the national road network is required to support economic

goals and growth?A backbone network of modern highways is considered essential

to facilitate reliable, safe and fast regional connectivity. This backbone network would

comprise limited access expressways where traffic demand is high, and safe high-speedhighways in other trunk road corridors where expressways will become justified only in

the longer term. To make logistics costs competitive, the network would need to

provide safe reliable journey times in the order of 1.0-1.5 hours/100 km (equivalent to

average speeds over 60 km/hour up to 100 km/hour), compared with the current

levels of 2.5-4.0 hours/100 km. Moreover, the backbone network needs to be

supported by a well structured network of arterial and collector roads with modern

road standards that support efficient distribution of traffic and that connect the

expressway network to manufacturing centres and local markets and land use

activities.

The spatial aspect of major economic infrastructure is a crucial element of planning

that requires a long-term horizon. The location of infrastructure assets such as

highways and expressways is essentially permanent and the structures themselves

have a long economic life of 25 to 50 years, with appropriate asset management. This

spatial element has a significant

influence on the environmental and

social impacts of physical

infrastructure, as well as on the

development of economic activity

and land use. Thus a long-range

vision of 50 years or more is

appropriate when planning the

layout of the network and the

corridor space that is, if the

support to spatial development is

to be constructive and if the

disruption to land-use activities is

to be minimised. Any decisions on

medium-term expenditures (e.g.,

five years) therefore need to be

optimised and prioritised firmly in the context of long-term plans extending over at

least 25 years and within a vision that extends to 50 years and beyond. This implies

Ambarawa bypass avoids conflict with urban

settlements. Courtesy of DGH.


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significant changes to the present approach to the planning of national road

development.

1.4 INDII STUDY ON ROAD NETWORK PLANNING

Following the review of expenditure budgeting and performance for national roads in

DGH (IndII 2010), which highlighted this connectivity and planning issue, IndII

supported a more detailed study in 2010-2011 to identify practical steps for improving

the planning of road network development. The study is documented in a series of

reports (IndII 2011).

The key objective of the study was to demonstrate how national connectivity and

mobility goals, supporting national economic imperatives and improved regional

accessibility, could be incorporated in the long-term and medium-term planning

processes of DGH.

1.4.1 Approach and Results

The study has approached the development of the national road network in Indonesia

from the viewpoints of first, an efficient and effective use of public funds, and second,

of defining the connectivity objectives by measurable outcomes - such as travel times

and other indicators - that can be used to monitor the achievement of development

goals and the effectiveness of public expenditure. The approach in the study wasgenerally analytical and used the findings of previous studies and the considerable

knowledge and expertise of Government officers and local and international

consultants.

The intention was to provide and demonstrate a basis for upgrading the DGH

procedures for the strategic planning of capital investment and the preparation of

long-term and medium-term expenditure programs that have a clear and measurable

linkage to national economic development goals and targets for development of the

national road network.

The result of the study has been the preparation of a long-term strategic framework toguide the development of national expressways and highways for the next 20 years,

set in the context of a 50 year vision11

.

The strategic framework would be implemented via practical mechanisms including:

11In practical terms, this horizon needs to be adjusted to conform to the Governments present

long-term plan (RPJP) which is a 20-year plan running from 2005 to 2024, and the subsequent

long-term period 2025-2044.


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Comprehensive plans on a corridor basis in order to develop a pipeline of projects

to guide long term forecasts of investment needs.

Multi-year expenditure planning based on the forecasts of investment needs. Targeted support on road network development toDGH and Badan Pengatur Jalan

Tol (BPJT, the Toll Road Regulatory Agency) to plan and implement this framework

for expressways and arterial roads, and resulting in improved planning and

programming in the short term.

Development of an Action Plan of key initiatives to be implemented in the next five

years with indicative directions beyond that (up to 10 years).

1.5 THIS REPORT

This report looks first in more detail at the challenges facing improvements to national

connectivity and at the issues relating to improving the planning of road development,

including the funding, programming and design of road network capacity

improvements.

The report then presents (inChapter 4:)the proposed new framework for planning the

development of the national arterial road network, including the expressway network,

to meet the connectivity goals and forecast economic growth in traffic demand. This

leads into a proposed program of support for DGH and BPJT to build capacity for

meeting this accelerated demand for network development. In particular, it includes

the basis for preparing a long-term financing strategy to support the rapiddevelopment of the network, drawing on both expanded public funds and private

sector investment. It demonstrates the forecasting of funding requirements, including

private sector resources, and how these link to the outcomes and performance

expected for the network.


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CONNECTIVITY

CHAPTER 2:CHALLENGE FOR NATIONAL CONNECTIVITY

2.1 CONTEXT

At present road transport dominates Indonesias land transport modes by carrying

over 70 percent of freight tonne-km and 82 percent of passenger-km (World Bank

2011). The remaining passenger and freight task is accounted for by air services, inter-

island shipping and inland waterway transport and rail. Air travel has a significant role

for enabling essential access to remote parts of the country. Water transport for inter-

island freight and passenger movement is critical for national integration. Each of the

major islands has at least one significant port. Inland waterways are limited to certain

areas of Eastern Sumatera and Kalimantan (World Bank 2011).

Four unconnected railway networks totalling 5,040 km of mainly single track (1,067mm gauge) in Java and Sumatera primarily transport bulk commodities and long-

distance passenger traffic. The Java rail network of 3,070 km contributes about 75

percent of the Indonesian Railways revenues, with passenger transport accounting for

83 percent of the total (World Bank 2011). Rails potential is constrained by inadequa te

infrastructure and limited markets in which it is competitive. Dedicated rail will be

needed for key resource developments but would be developed as dictated by

commercial considerations. While rail is likely to be operating below its potential,

efficient roads and road transport services will be critical to improving national

connectivity.

Demand for road transport is high and is likely to continue to rise rapidly. Thedemand for road transport is rising rapidly, with the vehicle fleet doubling from 41 to

81 million vehicles during the five year period 2004 to 2009. Within this there has been

sharp growth in motorcycle usage, with the motorcycle fleet growing by 130 percent

during 2004 to 2009 to reach 60 million which is more than twice the growth rate (56

percent) and three times the volume (21 million) of the balance of the motor vehicle

fleet (IndII, 2010). With current motorisation still low at only 70 vehicles12

per 1,000

persons, and an average per capita income of around USD 2,700, growth in the vehicle

fleet and road travel can be expected to continue at a pace in the vicinity of 10 percent

per year (IndII, 2010).

The total length of the Indonesian road system was 372,000 kilometres in 2009 and

consisted of: 35,000 km of national roads; 688 km of toll roads; 49,000 km of provincial

roads; 264,000 km of district roads; and 23,000 km of urban roads (IndII, 2010). Box 1:

Current Road Classification defines the current road classification. Through the public

expenditure program 2010-2014, the capacity of the national road network is being

expanded by about 4,000 lane-km/year from a level of 85,000 lane-km at the end of

2009, equivalent to an average of nearly 5 percent/year. Moreover, the national road

12280 vehicles per capita if two wheelers are included.


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network is being extended at a rate of about 1,600 km/year, through the addition of

strategic roads and reclassification of sub-national roads.

Travel on the national road network has been constrained by terrain and land use. About one third of total road vehicle travel is made on the national road network,

which DGH estimates to be growing by about 6 percent per year with a 2010 level of

about 80 billion vehicles-km per year. Road travel speeds however remain slow due to

generally low-speed road geometry standards that are characteristic of the generally

hilly terrain, and to generally high levels of side friction arising from extensive ribbon

development and weak controls on land use (IndII, 2010). Road surface standards are

fairly high on national arterial roads, with 90 percent paved and about 86 percent

reported to be in good or fair condition. However the rate of deterioration is high,

especially in the heavily trafficked corridors.

Box 1. Current Road Classification

Source: IndII (2011), Deliverable 2: Current State of Network Planning.

Road safety risks are high, especially for motorcycles. Along with increasing

motorisation, Indonesia is experiencing a serious road safety problem with over 30,000

fatalities occurring annually, and an estimated level of injury above 1,000,000 annually

(Eric Howard and Associates, 2008)13

. Fatality rates per 10,000 vehicles in 2004 were

eight times higher in Indonesia than in Australia, and more than twice the level in

Malaysia, an ASEAN good practice road safety neighbour. A high 60 -70 percent of the

fatalities involve motorcycles, followed by pedestrians. Continued sharp growth in

13Updated by official statistics and analysis of Indonesian National Police Traffic Corps crash

data, which show 31,234 fatalities in 2010.

Article 7 of Law no. 38/2004 defines three basic road categories: (i) public roads; (ii) specialroads (individual/private/dedicated roads); and (iii) toll roads. Public roads are divided intoPrimary and Secondary roads. Primary roads are further classified by function into: arterials andcollectors (with sub-categories K1, K2, K3 which are primarily administrative), and primary local(District roads). Secondary roads are local and neighbourhood roads in urban areas.

Primary roads are defined as linking big cities, medium cities and towns. A primary arterial roadconnects PKNs (National Activity Centre) to each other, connects between PKN and PKW(Regional Activity Centres), and links to airports and Airport Distribution Centres. The primarycollector road network (K1), also part of the national road network, connects PKW and PKL(Local Activity Centres).

The arterial and collector (K1) roads are the responsibilities of national government agencies.The K2 and K3 classified roads are generally the responsibility of provincial governments, exceptwhen they are identified in the national strategic plan (5 year RENSTRA) as strategic roads inwhich case they are eligible for national government funding. Thus some K2 and K3 classifiedroads might be the responsibility of both the national and provincial governments.

Some provinces have defined some K2 and K3 collectors as strategic roads, even though theroads are not included in the RENSTRA, and by ministerial decree those receive national funding

only after national needs have been fully met.


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motorcycle ownership rates is likely to increase fatality and injury rates further (Eric

Howard and Associates, 2008).

Access to roads and transport services in remote areas warrants investment on socialgrounds. It is estimated that 17 million people living in remote communities remain

without direct access to the road network or all-weather roads (World Bank 2011).

Currently, over 40 percent of the nations population lives outside of Java and steady

investmen

Documents

Modernising the National Road Network Report