World Bank Document · Indonesian State Railways (Perusahaan Jawatan Kereta Api - PJKA), with the objective of enabling the railways to reestablish and maintain both their proper

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No 387 1. r, V -!;> r f

Appraisal of Eporrs e

a Railway project WITHIN

Indonesia O I KAI

May 10, 1974

Rejgional Projects DepartmentLE

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Asia Regional Office

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Not for Public Use

Document of the International Bank for Reconstruction and Developmnt

International Development Association

This report was prePared fOr official use Only by the Bank Croup, tm

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CURRENCY EQUIVALENTS

Currency Unit - Rupiah (Rp)US$1 = Rp 415 /1Rp 1 = USJO.24Rp 1 million = US$2,410

WEIGHTS AND MEASURES

Metric British/US

1 millimeter (mm) - 0.04 inch (in)1 centimeter (cm) * 0.39 inch (in)1 meter (m) - 3.28 feet (ft)1 kilometer (km) 0.62 miles (mi)1 kilogram (kg) 3 2.20 pounds (lb)1 metric ton (m ton) = 2,204 pounds (lb)

ABBREVIATIONS

ADB - Asian Development BankBAPINDO - Bank Pembangunan IndonesiaBAPPENAS - National Planning CouncilDECONSULT - Deutsche Eisenbhan Consulting GMBH, FrankfurtPJKA - Perusahaan Jawatan Kereta Api

(Indonesian State Railways as ofSeptember 15, 1973)

sq mi - square mile

GOVERNMENT OF INDONESIA

FISCAL YEAR

April 1 to March 31

/1 March 1974.

INDONESIA

APPRAISAL OF A RAILWAY PROJECT

Table of Contents

Page No.

SUMMARY AND CONCLUSIONS ................... . ....... i-ii

Is INTRODUCTION ............................. 1

II. BACKGROUND .... ....................... .. 2

A. General .......................... 2B. Transport Sector ............................... . 2C. Transport Planning ...... ... ......... ... *.. . 5

III. THE INDONESIAN STATE RAILWAYS .......... ........... 5

A. Organization and Management .................... 5B. Staff .......... ....................... 7C. Accounting and Audit ............................ 7D. Railway Property ................ ... ............. 8E. Traffic .... ..................................... 10F. Operations .................. ................................ 11

IV. THE INVESTMENT PLAN AND THE PROJECT .................. 11

A. The Investment Plan ...... ...................... * 11B. The Project and the Proposed Loan ............... 13C. Execution of the Project ........................ 15D. Procurement and Disbursement .......... .......... 15E. Financing of the Project ........................ 15

V. FINANCIAL AND ECONOMIC EVALUATION ............ ........ 16

A. Financial Background . ........................... 16B. Rates, Fares and Costs ........ .......... .... . 16C. Financial Prospects and Targets .................. 17D. Financing of the Plan ..... ...................... 18E. Reconstructed Balance Sheet .................. ... 19F. Economic Evaluation ... ....... ............ ...... 19

VI. AGREEKENTS REACHED AND RECOMMENDATION ............. ... 21

This report was prepared by Messrs. W. Hughes (economist), G. Mackay(consultant), O.S. Murthy (engineer) and F. Sander (consultant).

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ANNEXES

1. Notes on the Organization and Management of PJKA2. Outline of (A) Training and (B) Technical Assistance Proposals3. Description of Railway Property4. Traffic Trends and Forecasts5. Investment Plan 1974/75 through 1978/79 - Main Items6. Items to be Financed by the Loan7. Estimated Schedule of Disbursements

TABLES

1. Staff Statistics and Projections2. Inventory of Motive Power and Rolling Stock3. Freight Traffic - Revenue Earning - All PJKA Lines,

Actual 1962, 1966-19724. Statistics (Java)5. Statistics (Sumatra)6. Traffic Forecast (Revenue Earning - 1972-79)7. Passenger Traffic - All PJKA Lines8. Investment Plan - 1974/75 through 1978/799. Project Investment 1974/75 through 1976/7710. Income Account - 1968-8011. Cash Flow12. Balance Sheets13. Passenger Traffic Costs14. Cost Analysis15. Economic Analysis of the Investment Plan

MAPS

IBRD 10815 (Java)IBRD 10814 (Sumatra)

IN-DONESTA


SUMMARY AND CONCLUSIONS

i. The Indonesian transport system comprises marine services which

linl, the islands, and highways and railways which provide the inlarnd

transport facilities. Land transport is well developed in Java with an

extensive railway and highway network, w-hile in Sumatra railways have been

developed only in some parts and the road network is limited to basic links

between principal cities. Air transport is still limited but is increasing

rapidly. Most transport facilities have been neglected and require rehabili-

tation and modernizing.

ii. This report appraises a project for the rehabilitation of the

Indonesian State Railways (Perusahaan Jawatan Kereta Api - PJKA), with the

objective of enabling the railways to reestablish and maintain both their

proper economic role in the transport sector and their financial viability.

The proposed loan of US$48 million equivalent in support of the Project

would be the first Bank Group assistance to Indonesia for railway purposes.

iii. The Indonesian State Railways is the largest railway system in

Southeast Asia. In 1972 the railways carried 4.6 million tons of freight

traffic and about 40 million passengers; they play an important role in

the economy of the country. The management of the railway is under the

Ministry of Communications and it is operated as an agency of the Government.

Until 1971 it was a statutory corporation, but for many years revenues had

been barely sufficient to meet working costs excluding depreciation. In

consequence, maintenance, repair and renewals were neglected and quality of

service suffered. Where modern equipment is available the railways are able

to offer good service at low cost. In the main, however, operations are

still hampered and costs are inflated by outmoded and ancient equipment, poor

track and inadequate standards of repair and maintenance.

iv. The five-vear Railway Investment Plan prepared by PJKA, and

accepted by the Government and the Bank,wil] be incorporated in the Govern-

ment's Second Five Year Plan (1974-1979). The objective of the PJKA Plan

is rehabilitation of the railways and improvement of operating and mainten-

ance standards through training and technical assistance. The total

estimated cost is Rp 103 billion (US$248 million equivalent). Implementation

of the Plan will assure a substantial improvement in the quality of rail

service, some increased capacity consonant with the traffic forecasts,

lower operating unit costs and ultimate elimination of operating deficits.

v. The Project comprises the first three years of the Plan, from

1974/75 to 1976/77, and is estimated to cost US$158 million equivalent,

of which US$98 million equivalent is in foreign exchange. Included in

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the Project are the renewal and rehabilitation of track, signalling, tele-communications, locomotives and rolling stock, the equipment of workshopsand depots with modern machinery, the building-up of inventories, and exten-sive training and technical assistance to optimize the benefits from thenroposed investment. Also included in the Project is a comprehensiverecovery plan designed to help PJKA break even financially by no laterthan fiscal year 1979/80. The proposed loan will finance that part of theforeign exchange component of the Project not covered by Governmentrcsc-urces and bilateral loans. It will finance track material and plant,signalling, telecommunications, diesel locomotives, passenger and freightcars, machine tools, spares and components, and technical assistance andtraining. Procurement will be through international competitive bidding inaccordance with the Bank's guidelines except for components and spares forexisting euipDment, estimated to cost TJS$6.5 million or about 14% of theproposed loan.

vi. The overall rate of economic return on the total investment isestimate<l at over 20,'. The financial benefits will also be substantial.A realistic estimate of the cost reductions which the rehabilitation programwil] induce indicates that by 1979/80, the railways should be able toreestablish their viability. While tlhe financial rate of return on theincremental investment will be substantial, the overall rate of return,based on the present day depreciated value of all railway fixed assets, willprobably be little more than 1% in 1979/80. Even so small a return in theshort span of five years represents a satisfactory reversal of the trendtow,ards rising costs and increasing deficits caused by almost three decadesof neglect and increasing inadequacy of service. The economic and costingstudies have established that there is a sound economic role for the rail-ways to play in Indonesia. The Plan and Project represent the minimuminvestment needed to assure that they do so.

vii. In view of the dilapidated state of the railways' assets and theinability of PJKA to service debt for the next several years, the Governmenth is agreed that the proceeds of the loan and bilateral loans, if any, neededto finance the Project should he passed on to PJKA in the form of equity.In 1979/S0 PJKA should again be viable. The Government can then considerthe reconversion of PJKA to a statutory corporation, and the extent to whichP,TKA should assume liability for debt service.

viii. The Project will be suitable for a Bank loan of US$48 millionequivalent to the Government of Indonesia for a period of 20 years, includingfive years of grace.

INDONESIA


I. INTRODUCTION

1.01 The Government of !tndonesia has asked the Bank to help financerehabilitation of the main lne railway systems of Java and North andSouth Sumatra. These lines constitute about 55% of the 6,800 km Indonesianrailway system. The Project would consist of the investments covered bythe first three years of the 1974-79 railway development plan - part of theGovernment's Second Five-Year Plan.

1.02 The total cost of the Project is estimated to be Rp 65 billion(US$158 million) and the foreign exchange content US$98 million. The loanwould provide US$48 million, and bilateral commitments or the Government'sown reserves are expected to cover the balance of the foreign exchange needsof the Project.

1.03 At the request of the Government, the Federal Republic of Germanyfinanced a technical aid project (1969-71) for management and planningassistance to the Indonesian Railways and conmissioned Deutsche EisenbhanConsulting GMBH (DECONSULT) to undertake the work. DECONSULT's finalreport, completed in September 1972, included the identification ofinvestments required for the rehabilitation and modernization of the rail-ways. These proposals formed a basis for extensive discussions with PJKAand the Government on the formulation of a railway project suitable for aBank loan. The present Project is the result of these discussions andextensive field inspections by the Bank.

1.04 This will be the first Indonesian Railway Project. Three creditshave been made for highways, one of $28.0 million in 1969 (Credit 154-IND)one in 1971 of $34 million (Credit 260-IND) and one in 1973 (Credit 338-IND)of $14 million. A DFC Credit (310-IND) of $10 million has been partiallyused for the rehabilitation of shipping through Bank Pembangunan Indonesia(BAPINDO) - a national development bank. The disbursement of Credits154-IND, 260-IND and 388-IND is proceeding satisfactorily. A credit of$8.5 million (318-IND) for rehabilitation of regular inter-island shippingservices was made in 1972. The credit is being disbursed slowly becauseof problems in finding creditworthy borrowers.

1.05 This report is based on the findings of an appraisal mission inSeptember 1973, composed of Sir Gordon Mackay, railway specialist (consultant),W. Hughes, economist, 0. S. Murthy, engineer, and F. Sander, financialanalyst (consultant).

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II. BACKGROUND

A. General

2.01 Indonesia is the world's largest archipelago, comprising about3,000 islands with a land area of 1.9 million km lying along the Equator.The island of Java is one of the most densely populated areas in the world(1,500 persons per sq mi). Sumatra is more sparsely populated but has themost important export-oriented activities. Java is more subsistence-orientedbut still exports substantial amounts. The population is about 124 millionof which about 80 million live on the main island of Java (1971) and 20 mil-lion on Sumatra.

2.02 The country is rich in natural resources, one of the most importantbeing sulphur-free oil, accounting for about 53% of export income. Oil isassuming an even more important role as a result of recent price increasesand expanding production. Secondary industry is still in its early stages,with only small factories for textile production, food processing, vehicleassembly, and metal fabrication. Basic industry is virtually limited to themanufacture of fertilizers, cement and paper. Many other industrial venturesare being planned, including nickel refining and aluminum plants.

2.03 Gross national product at current market prices was estimated atabout US$10.7 billion equivalent, or about $88 per capita in 1972. Economicgrowth during the period 1968-72 was about 7% p.a. in real terms and similargrowth is expected in the coming five years. Prices were stable between1968 and 1972, but the drought of 1972 and the substantial increase in themoney supply in 1973 has led to a recurrence of inflation. The contributionof the oil production sector to the economy, particularly after oil priceincreases, will have a favorable influence on the country's internal andexternal economic situation.

B. Transport Sector

General

2.04 The Indonesian transport system depends chiefly on highways andrailways and inter-island marine services. Land transport is well developedin Java with an extensive railway and highway network, whereas in Sumatrarailways have been developed only in some parts, and the road network islimited to basic links between principal cities. On the other islands,except for a small railway on Madura, transport facilities are limited toa few roads in areas around ports and towns. Air transport volume is stillvery limited, but has increased rapidly in the last few years.

2.05 In January 1974, the President indicated the broad outlines ofthe Second Five Year Plan (Repelita II) which commenced in April.The Government's strategy is to continue the present rehabilitation program

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for infrastructure and to gradually upgrade the country's transport facilities.Repelita II also expands the program to improve rural transport, and greatstress is being placed on a regional approach.

2.06 Roughly 10% of Repelita II expenditure is earmarked for transport(this does not include private investment in road vehicles, ships or invest-ment of any sort in aircraft); in addition, up to another 10% will go totransport through various revenue sharing schemes. The largest single ex-penditure is expected to go to highways.

Road Transport

2.07 The highway network consists of about 82,000 km of all standards,about 15,000 km paved. In 1971, the road transport fleet totalled 400,000 ve-hicles of which only 60% were in use because spare parts for many older makesare difficult to obtain. Most trucks are over ten years old and their aver-age capacity does not exceed 3.5 tons.

2.08 Road transport is most intensively developed in Java, where anumber of roads carry in excess of 2,000 vehicles per day. Sumatra hasabout the same length of roads, but many fewer vehicles. The two islandstogether account for about 60% of the highway network and 80% of the vehiclesin the country. After years of neglect, the present Government has emphasizedrehabilitation of the road network. This work was supported under the firstIDA credit for highways (154-IND).

2.09 The Government is now undertaking the improvement of almost 8,000 kmof roads with primary emphasis on pavement strengthening. A proposed fourthhighway project now under preparation is based on the program. Meanwhile,the second and third IDA highway projects are aiding major reconstruction ofseveral main roads in Sumatra and Sulawesi. The increased expenditure onhighways under Repelita II will require corresponding increases in the tech-nical staff of the highway authorities. A large scale training program forhighway maintenance is being implemented under the third highway project andit is hoped to continue this type of assistance under future highway projects.

Railways

2.10 Railways are confined (with one minor exception in Madura) to onlytwo islands, Java with about 4,700 km and Sumatra with about 2,000 km (Maps10814 and 10815). The system was built up to its present size during the70 years prior to the World War II, at which time there were six separatesystems and 40% of the network was owned privately. Nationalizatiou tookplace in the 1940's and 1950's. Lines built to move primary products toforeign markets suffered with declining exports of these products in the1950's and 1960's and, as with most public infrastructure in Indonesia,railway facilities were allowed to deteriorate. The railway system andoperations are described in detail in Chapter III and the investment programis described and evaluated in Chapters IV and V.

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Ports and Shipping

2.11 The country has about 300 ports, but the large traffic volumes areconcentrated in 10 ports in Java, Sumatra, Sulawesi and Kalimantan. Portprocedures represent the most serious impediment to transport flows inIndonesia and their modification could result in significant increases inport capacity and in general reduction in shipping costs. However, majorchanges will take a long time. Studies of short-term port requirements havebeen completed with assistance from the Netherlands. The main ports arebeing improved with assistance from Asian Development Bank (ADB), the Nether-lands and Japan. A master plan study of Tanjung Priok (Jakarta), thelargest general cargo port (about 30% of total), was recently begun by aCanadian firm financed under an IDA Technical Assistance Credit.

2.12 The inter-island shipping fleet suffered from the same neglectas other modes of transport and the 1972 IDA Credit of US$8.5 millionequivalent was designed to assist in the rehabilitation of part of thisfleet.

River Transport

2.13 With the exception of the Citandui River in Java, coimercial rivertransport is limited to 10,000 km of navigable waterway in Kalimantan, Sumatraand West Irian. Fourteen rivers totalling 4,000 km in Kalimantan and Sumatrawere recently studied by Belgian consultants, and the Government is consideringpossible navigational improvements. Logs (Indonesia's second largest export)are the most important movement.

Pipelines

2.14 Pipelines are under the control of the state-owned oil company -Pertamina. There is presently only one in operation, a 27 km 12" productsline. Another 420 km are under construction or planned and are expected todivert significant volumes of traffic from road and rail (some 380,000 tonsfrom rail by 1976).

Aviation

2.15 There are 47 airports (seven open to international traffic) andfacilities vary widely. Frequent deficiencies, as identified in a recentstudy by Aviation Planning Services, are the weak runways, insufficient runwaylength and inadequacy of navigational equipment. Most needs are for equipment,and bilateral finance is likely to be available to support these purchases.A study to prepare a master plan for Jakarta International Airport is tostart shortly.

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C. Transport Planning

2.16 As explained above, the efforts of the government in the field oftransport planning and investment have in recent years concentrated on therehabilitation of the main transport network. This emphasis is to continueduring the Second Five Year Plan period, but it will be supplemented bythe provision of new infrastructure necessary not only for the exploitationof newly-found resources but also in support of the government's regionalpolicies. A recently created planning department in the Ministry ofCommunications is to help in evaluating projects.

2.17 Although only two ministries, Works and Power in the case ofhighways and the Ministry of Communications in the case of other modes, areresponsible for proposals for investment in transport which are then reviewedby the National Planning Council (BAPPENAS), selection of projects in recentyears has been made in a rather haphazard manner. This has been partlybecause of lack of qualified technical staff to prepare, evaluate and rankinvestment priorities. Due to the scarcity of experienced staff, transportplanning is not well organized and investment projects are prepared generallywithout adequate analysis. In order to improve this situation, the Govern-ment retained a group of consultants between 1969 and 1973 to assisttransport planning for BAPPENAS and the Ministry of Communications. Theconsultant services were financed by the UNDP, and the Bank acted asexecuting agency. These consultants have contributed in collecting andanalyzing transport data and setting up procedures for investment projectreview, but their tasks are far from completed. It will be some yearsbefore the Government has all the required staff and therefore some continuedoutside expert assistance is necessary. The Government intends to retainfor the Ministry of Communications, with financing from the Bank Group'stechnical assistance credit (451-IND), about five advisors (with initialcontracts for 2 years) on transport coordination, investment programming,pricing and accounting. In addition, UNDP funds are available for provid-ing advisors to assist BAPPENAS in project evaluation and resource evaluation.

2.18 The Bank's Resident Staff in Indonesia is currently engaged in areview of the transport sector, examining past achievements and consideringmeasures required for improving efficiency and performance in the sector.This should be of assistance in formulating future strategy for economicassistance to the sector.

III. THE INDONESIAN STATE RAILWAYS

A. Organization and Management

3.01 The Indonesian State Railways is the largest railway system inSoutheast Asia, handling about 4.9 million tons and 1.1 billion ton-km offreight traffic and about 30 million passengers and 2.7 billion pass-kmp.a. (1973). By a Presidential Decree of September 15, 1971, the Governmentdecided to change the Railways from a statutory corporation under the Minister

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of Communications to a government agency - or PJKA - under the same Minister.As a corporation, the Railway theoretically had powers to maintain its ownbudget, to raise funds, to contract and to institute legal proceedings andwas expected to operate on business principles and be financially viable.In practice, however, the organization was not strong enough financially tostand on its own feet as a corporation.

3.02 Details of the Government's control of PJKA and of PJKA's currentinternal organization are given in Annex 1 and the accompanying organizationcharts.

3.03 The conversion of the Railways into a government agency, resultingin the loss of their legal personality, legalized a position which alreadyexisted. As a government agency PJKA has its own management and accountsand a separate section of the national budget. 1/ The powers of theMinister in regard to policy matters and his responsibility to providerailway services to the public through PJKA remain unaltered; and the powersof the previous Board of Directors in regard to executive matters have beenvested largely in a sole Chief Director. The Government has indicated thatit wishes PJKA to operate commercially and become financially viable as soonas possible. Once this goal has been achieved, the Government can considerrecreating the railway as a corporation (see Chapter V).

3.04 The limitation of the Chief Director's powers on policy mattersdoes not interfere with the effective day-to-day management of the railway,and communications between the Ministry and the Chief Director are generallygood. To assist PJKA to be responsive to the needs of users and to fostercommercial practice, the Government is setting up consultative councils(a) at the national railway, and (b) at divisional railway levels (see nextpara). The Bank will cooperate in defining the duties and functions ofthese councils which are to be introduced at the earliest practical date.

3.05 The Chief Director is supported by a divisional organizationwhich delegates considerable management responsibility to six divisions,three in Java and three in Sumatra. This works reasonably well but coor-dination is hampered by distance and poor telecommunications. The provi-sion of better telecommunications under the Investment Plan should improvethe situation.

3.06 In general, management is good in spite of problems related to pastneglect, inadequate finances, obsolete and badly maintained equipment andrelatively inexperienced staff at the operating level. Assistance In easAingthese problems will be found in the proposed Project, which will rehabilitate

1/ The budget arrangements are not yet in force; PJKA's accounts willnot be ready for inclusion in the state budget until FY75/76, beginningApril 1, 1975.

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the plant and equipment and provide technical assistance, the need for whichis accepted by the Government and PJKA. Details of the technical assistanceto be provided under the proposed loan are outlined in Annex 2.

3.07 Management's organizational structure has to be strengthened topermit more efficient control. Measures outlined in Annex 1, to allow closer,more specialized control and to redace present bottlenecks, have beendiscussed with the Bank and are in ,rocess of introduction.

B. Staff

3.08 Since 1966, the nutnber of staff employed by the Railways hasdecreased from 88,586 to a figure of about 60,000 (July 1973). The Govern-ment, in conjunction with PJKA, intends to continue the policy of selectiveearly retirements to achieve a net reduction of 12,000 and a total staff of48,000 by 1979. Staff employed and their costs and productivity for 1972projected through 1979 are shown in Table 1. Over the period, there willbe a varying number of inactive staff receiving severance pay (Table 10,page 3).

3.09 The reductions in staff will be facilitated by increases in staffefficiency made possible by new investments under the Five Year DevelopmentPlan (e. g., dieselization), by operational and management improvements andby stmplifications in organization and procedure and by increased trainingof both new and existing staff, on the job and overseas, supported by aprogram of short-term technical assistance. The Government and PJKA agreethat reduction of skilled staff will be carefully controlled and coordinatedwith the output of effective training programs so that the efficient execu-tion of the Project is not prejudiced.

3.10 Emoluments for all cadres of staff are low, ranging in 1973 fromabout Rp 7,000 to about Rp 65,000 per month. These emoluments, which arein line with other Government paid services, include family and otherallowances, and payments in rice and sugar. Housing is free. A programbegun in 1971 increases all basic salaries through 1975 at the rate of 100%p.a. of that in 1970, which then averaged Rp 20,000 p.a. The cost of theseincreases is being offset, to a great extent, by progressive decreases inthe number of staff. The relation of projected staff costs (which makeallowance for further salary increases) to estimated operating expensesremains satisfactory at around 40%. Staff productivity, which is currentlyon the low side, is expected to increase to a satisfactory level.

C. Accounting and Audit

3.11 Budget preparation, bookkeeping and presentation of the finalaccounts are the responsibility of the Chief Finance Officer, who reports tothe Director, Commercial. Under the same Directorate, there is a Controller,

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whose staff carry out the duties of internal audit. The system should bemodernized. For example, the classification of expenditure fails to providethe data needed for financial management and costing, and internal auditdoes not include inventory verification, which is carried out by officersemployed by and responsible to the Stores and Purchasing Department. TheGovernment and PJKA agree that the nost suitable manner of revising thesystem would be to engage a firm of public accountants, established inIndonesia, to assist and advise the staff of the railway. PJKA will alsorevise its accounting and internal audit procedures in accordance withaccepted standards of modern practice and will establish a traffic costingsystem by June 30, 1976.

3.12 The Government Audit Department has an office in PJKA headquartersin Bandung and sub-offices in each of the Regions. The officer in chargeis a qualified accountant of considerable ability and energy, and the conductand scope of the work of his subordinates attain standards acceptable to theBank.

D. Railway Property

3.13 Annex 3 describes in detail the physical assets of PJKA.

Track and Structures

3.14 PJKA operates a system of 6,793 route-km almost wholly of 1,067mm gauge, of which 182 km are double track and 110 km are electrified on1,500 volts DC. There are six geographically unconnected systems servingthe islands of Java, Madura and Sumatra (Maps 10814 and 10815). Of these,the most important is in Java - 4,834 route-km, of which 2,792 are mainlines.The latter are laid mostly with 41.52 kg/m and 33.4 kg/r rail while thebranch lines have 25.7 kg/m rails. Sleepers are mostly hardwood and ballastis broken stone or gravel. The track is maintained by manual labor.About 20% of sleepers on the mainlines and 35% of those on branch lines arein poor condition. Track fittings need large scale replacement. Theballast is inadequate except for a few sections on the mainlines of Java.In the absence of systematic methods of maintenance, the standard of trackis unsatisfactory. Speed restrictions have been imposed over longstretches. Bridges and other structures are generally in satisfactorycondition.

3.15 PJKA was planning to rehabilitate the mainlines in Java for speedsof 100 km/h. Apart from the heavy investments involved, adequate maintenanceof track for such speeds on relatively narrow gauge track raises seriousproblems. It has been agreed by the Government that, during the Plan period,maximum permissible speeds would not be raised from the present limits of80/90 km/h.

3.16 Telecommunications rely on the telephone and a radio network linkedto a few stations. The signalling is mainly mechanical and varies from

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modern type operated by double wire and tokenless block instruments to out-moded wooden lever frame and disc typeat. Improved signalling is necessaryon considerable sections of the main line. Except on a few sections inJava, there is little centralized train control. A sophisticated radiotrain despatch system between Jakarta and Cirebon has recently been broughtinto commission. A cheaper selector operated telephone network on existingwires, similar to systems which have been working satisfactorily on otherrailways in Southeast Asia, would be adequate for train despatch and exten-sion of radio train despatch will not be undertaken during the period of theProject unless the Bank otherwise agrees. For administrative purposes anexpanded radio network supported by teleprinter circuits is required.

Motive Power and Rolling Stock

3.17 Table 2 shows the details and age of the motive power fleet androlling stock on the books of PJYA as of June 30, 1973. The fleet includes570 steam and 311 diesel locomotives, about 22,000 freight cars and 2,500passenger cars. A large part of the motive power and rolling stock iseither out of commission or too old to function efficiently. A major reasonfor the high repair ratio is lack of spare parts.

Workshops and Maintenance Depots

3.18 Locomotives and passenger and freight cars are repaired and main-tained in five workshops in Java and two in Sumatra as well as about 35 line-maintenance depots (Annex 3). With the gradual withdrawal of steam locomo-tives and wooden body passenger cars, three workshops at Mangarrai (nearJakarta), Jogjakarta and Surabaya, should suffice in Java, with two smallworkshops serving Sumatra. Part of the Madiun Shop (Java) will be utilizedfor permanent way work.

3.19 All the workshops except Jogjakarta are very old and ill-equipped.While the output suffers from lack of imported spare parts, better produc-tion planning, methods and control are needed. To achieve this, technicalassistance and training form part of the Project.

3.20 Line-maintenance depots are ill-equipped, resulting in lightrepairs being transferred to workshops. The Project provides for betterequipment for the depots.

3.21 The bridge and structural fabricating workshop at Bandung iscapable of producing 1,000 tons of steel bridge girders per annum. Capacitywill be expanded to 2,000 tons p.a. under the Project.

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E. Traffic

Freight Traffic

3.22 Annex 4 describes past traffic trends and forecasts the future.PJKA's revenue-earning freight traffic for the period 1962-72 is shown inTable 3. From 1962 through 1966 ton-km carried declined by about 23% be-cause of poor quality of railway service, increased competition from roadtransport for short hauls, and reduced production of rubber, coffee andcoal.

3.23 Between 1967 and 1972, the traffic increased at about 9% p.a.because of the improved economic climate and as a result of modest additionsto rolling stock. In 1973, traffic again increased, by 7%, to over 1.1 bil-lion ton-km (Tables 4 and 5).

3.24 For the period 1974 through 1979, the composition of rail trafficis expected to change because of a drop in the proportion of traffic inoil and oil products (due to the construction of oil pipe lines) and anincrease in the proportion of agricultural and forestry products. Table 6shows mission's forecasts of PJKA's freight traffic from 1974 through 1979.The average overall rate of growth for the period will be just under 5% p.a.

Passenger Traffic

3.25 Table 7 shows the PJKA's passenger traffic from 1962 through 1973.During this period, passenger traffic decreased, from 7,049 to 3,352 millionpass-km. The growing competition from road transport including "civicmissions" by the military, the poor and unreliable service offered by therailways) reduction in operations on branch lines, and the cancellation ofsome commuter services because of lack of locomotives and passenger cars,all contributed to the decline. During 1973 there was a further sharp dropof about 20Z in pass-km. This was the result of further contraction of trainservices, coupled with a substantial increase (about 30%) in basic passengerfares introduced in May 1973, which discouraged short-distance passengertraffic. However, overall passenger revenue increased in 1973.

3.26 Table 7 shows the forecast of PJKA passenger traffic for theperiod 1974-79. The forecast for 1979 at 40.4 million passengers and3,724 pass-km is only slightly higher than the 1972 levels. The railwayremains a major carrier of long-distance passengers, and many of the servicesare overcrowded. With the renewal and rehabilitation of track and passengercars ensuring faster and more regular passenger services, it is reasonableto expect passenger traffic to recover, especially for long distances.1/

1/ During negotiations the Bank was advised of a recent Government decisionto use PJKA for reasons of safety and orderly transportation, for themovement of all passengers under the Transmigration Program from Eastand Central Java to Sumatra.

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F. Operations

3.27 Tables 4 and 5 summarize operating statistics. The most signi-ficant feature of operations in Java is the predominance of passengerservices. Another feature of note is the poor availability of both motivepower and rolling stock, due to lack of spares and inadequate repairfacilities.

3.28 Many mixed trains are operated on main lines. A study of theneed for mixed trains will be included in the terms of reference of theteam to provide technical assistance in the field of train operations(Annex 2).

3.29 In 1972, the average net load of freight trains was only 101tons in Java, and 80 tons in Sumatra. Serviceable freight cars ran only 50km per day. Substantial improvements in operations could be achievedthrough more intensive utilization of diesel locomotives, includingextended locomotive runs, especially for through freight services.

3.30 As part of the recovery plan included in the Project (para 4.10),PJKA's operations will be improved by the end of 1976/77 to realize anincrease of 20% in average net train loads in Java and 25% in Sumatra, togetherwith an increase of 10X in car-km per car day, improvement in diesel locomo-tive availability from 70% at present to 83% and freight car availabilityfrom 83% to 95%.

IV. THE INVESTMENT PLAN AND THE PROJECT

A. The Investment Plan

4.01 A five-year Railway Plan prepared by PJKA has been accepted by theGovernment and the Bank and will be incorporated in the transport sector ofthe Government's Second Five Year Plan (1974/75-1978/79).1/ The main objec-tive of the Plan is to remedy the neglect of the past 25 years and, bycreating adequate facilities and training for proper repair and maintenance,to assure"the sustained provision of more efficient railway service. Annex5 describes in detail the proposed investment, which is estimated to costRp 103 billion (US$248 million equivalent) with a foreign exchange componentof US$150 million equivalent.

1/ The original Railway Plan, based on a report submitted by DECONSULT,a firm of consultants commissioned by the Federal Republic of Germanyas part of technical and requested by the Indonesian Government, wasrevised following the appraisal mission's discussions with PJKA andthe Government.

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4.02 The Plan does not include investment for urban rail transportin Jakarta, which has recently been intensively studied. The Govermenthas agreed to furnish the Bank with the results of the studies and willnot undertake any major PJKA investment in this project without the prioragreement of the Bank.

4.03 The main items included in the Plan (Table 8) are: the rehabil-itation of the main lines of Java and to a limited extent those of Sumatra;rehabilitation and improvements of signalling and telecommunications; re-habilitation of 59 diesel locomotives, 290 passenger cars and 4 diesel railcars; the procurement of 60 diesel locomotives, 10 sets (of two cars each)of electric rail cars, and 12 sets (of two cars each) of diesel rail cars,61 passenger cars, 300 bogie freight cars (including 120 ballast hopper cars);fitting air brakes on about 7,500 freight cars and automatic couplers onabout 670 freight cars; improvements to repair facilities; re-stocking ofinventories and training and extensive technical assistance in managementand operations. The technical assistance is expected to be through teasof expatriates from large railways working in the field alongside Indonesiancounterparts for limited periods ranging from two to three years (pars 13 ofAnnex 5). A summary of the Plan is as follows:

Rp Billion US$ MillionEstimated Estimated

Total F.E. Total F.E.

Rehabilitation of Track 35.2 9.7 84.8 23.5Signalling and Telecom's 6.3 2.3 15.2 5.6Locomotives and Rolling Stock 30.7 28.5 74.0 68.7Workshops and Depots 2.8 2.4 6.8 5.8Inventories 3.4 3.0 8.2 7.4Technical Assistance 5.0 3.8 11.1 9.0Contingencies 19.6 12.5 47.2 30.0

Total 103.0 62.2 248.3 150.0

4.04 Track rehabilitation in Java includes (i) the north line in Java,(ii) other sections of the main line system and (iii) maintenance toolsand plant. The North line includes completion of re-laying of track betweenJakarta and Semarang and limited expenditure beyond Semarang (Annex 5, para1).

4.05 Improvements to telecommunication will include a radio and tele-printer network connecting major centers of railway activity.

4.06 With the rehabilitation of existing diesel locomotives, theirbetter utilization and the acquisition of 60 new locomotives, PJKA shouldbe in a position by 1979 to run all main line services in Java and themajority of main line services in Sumatra with diesels. The recovery plan(para 4.16) includes a phased program of withdrawal of steam locomotives(Annex 5, page 11).

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4.07 Also included in the recovery plan, and consequent upon therehabilitation of passenger and freight cars and their better availability,is the scrapping of many over-aged cars presently lying unused in the yards(Annex 5, paras 8 and 9).

4.08 Due to lack of foreign exchange, PJKA's stocks of spare partsand components have been badly depleted. The Plan provides for re-stockinginventories.

4.09 To get the fullest realization of benefits from the investments,the Plan provides for extensive technical assistance in all important aspectsof PJKA's activities, supplemented by a well coordinated program of stafftraining in both management and operational fields (Annex 2).

B. The Project and the Proposed Loan

4.10 The purpose of the Bank's involvement in the Project is toassist PJKA in effecting improvements in its functioning through technicalassistance in most aspects of its operations, building up of inventories,rehabilitation of its assets, and generally through identifying priorityareas requiring investments. The proposed Project consists of improvementsand investments during the first three years of the Plan, aimed at enablingthe railways to regain and maintain, their proper economic role and financialviability. It includes a recovery plan agreed between the Government andthe Bank designed to allow PJKA to break even not later than fiscal year1979/80. The Project includes the rehabilitation of track and signalling,the rehabilitation of 59 diesel locomotives, 120 passenger cars, 4 dieselcars; the procurement of 40 diesel locomotives, 10 sets of electric railcars and 12 sets of diesel rail cars, 61 passenger cars, 200 bogie freightcars; fitting of air brakes on about 3,680 freight cars and automaticcouplers on 670 freight cars; and technical assistance in most fields ofrailway operation. Details are as shown in Table 9. The total cost of theProject is estimated at US$158 million equivalent, with a foreign exchangecost of US$98 million equivalent, of which the proposed loan will financeUS$48 million. Items to be financed by the proposed loan are detailed inAnnex 6. A summary of the Project and loan expenditure is shown below.

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Expenditure Rupiah Expenditure US$ Loan/Local Foreign Total Local Foreign Total Items…Rupiah millions----- ---US$ million equivalent--

Rehabilitation of NorthLine 2,829 4,163 6,992 6.8 10.0 16.8 -Rehabilitation of Trackother than North Line 13,338 2,814 16,152 32.1 6.8 38.9 4.8

Tools and Plant forTrack and Maintenance 275 521 796 0.7 1.2 1.9 1.3Rehabilitation and Im-provement to Signalling 1,728 286 2,014 4.2 0.7 4.9 0.2Improvement to Telecom-munications 333 1,287 1,620 0.8 3.1 3.9 1.2

Locomotives--Rehabili-tation and New 792 10,703 11,495 1.9 251.8 27.7 11.0

Rail Cars--Rehabilitationand New 132 2,141 2,273 0.3 5.2 5.5 -Passenger Cars - Rehabili-tation and new 160 3,486 3,646 0.4 8.4 8.8 6.0

Freight Cars - Rehabilita-tion and New 472 3,652 4,124 1.1 8.8 9.9 4.5

Workshops and Depots --/2Rehabilitation andImprovement 390 1,680 2,070 0.9 4.1 5.0 2.1Inventories, Spare Partsfor Locomotives, Freightand Passenger Cars, andRaw Material 189 1,654 1,843 0.5 4.0 4.5 4.0

Sub-total 20,638 32,387 53,025 49.7 78.1 127.8 35.1/3Price Contingencies- 3,125 6,047 9,172 7.5 14.6 22.1 7.3

Technical and ProcurementAssistance and Tech-nical Training /4 864 2,324 3,188 2.1 5.6 7.7 5.6

Grand Total /5 24,627 40 758 65,385 59.3 98.3 157.6 48.0

/l Where amounts shown against loan do not cover wholly the foreign exchange com-ponent of the item, bilateral/Government finance has been either covsittedor is expected to be available.

/2 Includes provision for stock of main components like complete engine and transmis-sion for improved output of shops and depots.

/3 Excludes contingencies on technical assistance and training./4 Includes contingencies./5 Including: (a) price contingencies at the rate of 12% p.a. on foreign

components which, taking into account scheduling of ordering of equipment,results in an overall provision of 20%; (b) contingency for local procurementof 7.5% p.a. compounded, which results in an overall provision of 15%; and(c) a built-in allowance of 10% for physical contingencies on civil and trackworks.

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C. Execution of the Project

4.11 PJKA are competent to execute the Project, with the technicalassistance provided in the Project.

4.12 The cost estimates for equipment, components, spares and othermaterial are based on latest known prices. Price contingencies on importedgoods are based on assumptions of 12% p.a. increases and an 18-month averagedelivery period, resulting in an overall provision for the Project periodof 20% over current cost estimates. The overall local provision for contin-gencies is 25Z made up of 10% built-in provision for civil and track works,with a further 15% for price contingencies.

D. Procurement and Disbursement

4.13 Procurement of all items financed under the loan will be throughintehnational competitive bidding, in accordance with the Bank's Guidelinesexcept for certain components and spare parts required for equipment alreadyin service estimated to cost about US$6.5 million. Non-competitive procure-ment will be negotiated mainly with original suppliers in consultation withthe Bank.

4.14 PJKA will employ consultants or agents acceptable to the Bank toassist in the preparation of tender documents and in handling the proceduresrequired by the Guidelines for Procurement under Bank loans. The proposedloan will be disbursed against the full c.i.f. cost of imports and theforeign exchange costs of technical assistance; an estimated disbursementschedule is shown in Annex 7.

4.15 Any saving under the loan will be used to finance additional, butsimilar, Project items, subject to review and agreement with the Bank.

E. Financing of the Project

4.16 The following table summarizes the financing plan of the Project:

Financed from: RP Billion US$ Million X

Government resources andbilateral loans 45.46 110 69.5

Proposed Bank loan 19.92 48 30.5

Total 65.38 158 100.0

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4.17 During the three years of the Project, PJKA will be unable tocontribute funds for capital investment. In later years, when the benefitsof the rehabilitation plan are realized, PJKA's contribution will be substan-tial, as indicated in para 5.12.

V. FINANCIAL AND ECONOMIC EVALUATION

A. Financial Background

5.01 The financial discipline of PJKA's operations has for many yearsbeen governed by the principle that cash operating costs should not exceedoperating revenue. This objective has generally been achieved, althoughat the expense of unduly restricting maintenance and repair expense.Provision for depreciation has been merely nominal. All funds for capitalinvestment, whether for replacement or for increased capacity, have beenprovided by the Government, but such capital transactions in recent yearshave not been recorded in the railway's books.

5.02 It has been necessary therefore to quantify and evaluate thecapital assets in productive use, to calculate depreciation, and fromthe resultant data to reconstruct the existing financial position andmake projections of the future, commensurate with the approved trafficforeeast. The resultant figures are shown in Table 10, Income Account,Table 11, Cash Flow and Table 12, Balance Sheets.

B. Rates, Fares and Costs

5.03 On May 2, 1973, PJKA increased both freight and passengertariffs substantially. The new passenger tariff fixes fares on a graduatedscale for individual trains and categories of train related to the standardof speed, comfort and service offered. A passenger may, for example, paymore for a third class ticket on a superior train than for a second classticket on an inferior one. A high minimum fare is prescribed to discourageshort-distance travel. The principles upon which the passenger fare struc-ture is based are sound. Long-run variable cost constitutes the floor forpricing, and quality of service dictates the ceiling. The cost statementfor the Jakarta-Bandung express service, presented in Table 13, shows asubstantial excess of receipts over costs; although fares are relatively high,the service is well patronized, reflecting the public's evaluation of thesuperiority of railway service over road on this route.

5.04 The revised freight tariff follows traditional patterns ofcharging on the basis of "what the traffic will bear." As in the previousyears, it consists of six class rates. On the basis of 1973 costs thetariff has the following deficiencies:

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(a) All class rates are too low at distances below 100 km;

(b) Class 6 is too low at all distances; and

(c) the minimum wagon-load for charging is 9 tons for atwo-axle wagon, but no differential preference isgiven for loading to maximum capacity although thecost differential per ton of net load as between 9tons and 15 tons per wagon (the maximum for a two-axlewagon) is 33%.

These three weaknesses will be corrected not later than May 31, 1975.

5.05 It has been further agreed (a) that PJKA's tariffs will be revisedfrom time to time in the light of costs and market conditions and (b) thatthe revenues from each freight and passenger class will meet long-runvariable operating costs and make a contribution towards fixed costs. Tech-nical assistance is being provided to assist with the costing requirement.A detailed cost analysis relating to the past 3 years is included in Table14.

C. Financial Prospects and Targets

5.06 In Table 10, the forecast income account to 1979 is shown.The forecast incorporates all foreseeable increases in wage and materialprice levels, offset by economies which may realistically be expected fromstaff reductions and from dieselization, mDdernization and improvement ofoperating standards. Depreciation is included, and is based on the replace-ment value of existing productive and renewable plant and equipment, withsuch additions as are needed to handle the traffic projection, and servicelives related to acceptable standards of utilization of the assets. Theresulting figures for depreciation range from Rp 5,040 million in 1973 toRp 6,500 million in 1979.

5.07 On these bases, it is projected that PJKA will cover all operatingcosts, including depreciation, in 1979/80 and earn a small return on theinvestment, about 1-1/4%.

5.08 In 1979/80, therefore, PJKA should have attained a financialsituation in which consideration could again be given to re-establishingit as a statutory corporation, with financial autonomy and the abilityto finance a large part of its capital investment (see para 5.14). Untilthen, as agreed with the Government, there is little alternative but toconsider the Government's contribution to railway investment as acontribution to equity, on which a return is unlikely to be earned before1979. At that time, a decision can be made in the light of longer-rangedfinancial projections as to what return PJKA should pay to the Governmentfor the latter's investment in the railways.

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5.09 In the meantime, PJKA remains short of sufficient working cashfor efficient operation. It will be necessary for the Government to coverPJKA's operating cash deficiencies, probably to late 1976, and in additionto provide now sufficient funds to bring PJKA's working cash balances upto an adequate level, assessed at six weeks' (i.e., about 12%) of theannual working cash requirements at the level of operation current at therelevant time. This has been agreed and substantial progress has alreadybeen made towards reaching this level.

5.10 Other financial targets on which agreement has been reached areas follows:

(a) that in the light of the findings of studies currentlybeing made by consultants (DECONSULT) of the financial,economic and operating justification of feeder lines inJava, and of the recorded financial results of the WestSumatra and Aceh railway systems, the Government willdecide by October 1975 whether these lines are to becontinued in operation and, where they are, will coupensatePJKA for any losses incurred thereon;

(b) that until the Project shall have been completed nocapital expenditure shall be incurred outside theProject exceeding, say US$1,500,000 in any one year, orUS$500,000 on any individual work; and

(c) that PJKA shall achieve operating ratios of 140 by 1974/75,improving to 131 by 1976/77 and to 100 or better by 1979/80.

D. Fihancing of the Plan

5.11 The financing of the Plan is forecast as follows:

Rp Billion US$ Million %

Funds RequiredCapital development and rehabilitationprogram (Repelita II), 1974/75 to1978/79 103.1 248.3 97.1

Other capital investment 1.5 3.6 1.4Working capital, increase in cashbalances 1.6 3.9 1.5

106.2 255.8 100.0

Sources of FundsInternally generated funds, PJKA 11.9 28.5 11.2Estimated savings from closure ofuneconomic lines, nationalization,compensation, or state subsidy there-for (see Table 10 , page 1) 4.6 11.1 4.3

Borrowing:Government resources, bilateral loansand other sources 69.8 168.2 65.7Bank loan 19.9 48.0 18.8

106.2 255.8 100.0

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5.12 Completion of the Plan is assumed to carry over into 1979/80.

In each year from 1974/75 onward, provision of Rp 250 million is made for

unforeseen works not included in Repelita II. It will be noted that, assuming

the projection to be realistic, the local currency needs of the Plan will

be provided 27% from PJKA cash generation and 73% from Government resources.

As, however, PJKA contributions are, in effect, benefits which will accrue

from the investment, they naturally increase over time, while Government

contributions correspondingly decrease, as shown below:

PJKA Government TotalRp million

1974/75 (1,853), 8,211 6,3581975/76 (1,220) 7,717 6,4971976/77 ( 328) 10,118 9,7901977/78 2,106 5,475 7,5811978/79 4,993 551 5,5441979/80 8,144 - 8,144

Total 11,842 32,072 43,914

5.13 Bilateral lending is not yet fully committed, but there is

little doubt that it will become available. The possibility of a further

Bank Group operation is not overlooked, but the need for it can only be

assessed after the Plan has been underway for some time.

E. Reconstructed Balance Sheet

5.14 Balance sheets, reconstructed on commercial lines, are shown

in Table 12. All capital investment financed by borrowing or from the

Government and PJKA's own resources is classified as Government equity

investment in the railways up to the end of the period of the projections.From 1979/80 onward, PJKA should be able to provide all local currency

required for future investment and to accept responsibility for debt in

respect of any further borrowing for railway development. At that time its

re-establishment as a public corporation could be considered.

F. Economic Evaluation

5.15 As already mentioned, the relative importance of the railway

system has declined in recent years with the development of other modes

of transport, which is a normal phenomenon. However, this has been

seriously aggravated by the neglect of both physical assets and operational

efficiency for almost 25 years, which led to the inability to offer a

service comparable with that provided in the 1940's, and consequent loss

of traffic. In spite of inadequate facilities, the railways still retain

important traffic on medium and long haul routes that give them a competitive

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advantage over any alternatives. The basic rationale for PJKA's 1974-79Investment Plan and the accompanying measures for managerial and operationalimprovements proposed is that by reducing costs and providing more attractiveservices, they will retain traffic which they would lose if the railways'plant and equipment were allowed to deteriorate further, and also recoversome of the traffic lost in recent years because of PJKA's inability toaccept it.

5.16 Tne 1974-79 Investment Plan is a coordinated program ofrehabilitation and modernization designed to enable the railways toperform efficiently and carry the rail traffic forecast during the Planperiod. Most of PJKA's investment will be devoted to the rehabilitationof main trunk lines and the replacement of rolling stock for services onthese lines. Rehabilitation now will prevent further rapid deteriorationof assets and increase in costs of maintenance of essential lines. Ifthe Plan is not implemented, declining quality of service and diminishingcapability to move traffic will result in diversion to other, moreexpensive, modes of traffic and, where there are no such alternatives,to the cessation of traffic.

5.17 The benefits from the various items in the Plan (moderniza-tion of workshops, rehabilitation and replacement of freight and passengercars and motive power, the rehabilitation of track, etc.) are interdependentand will be realized through complementary improvements in the areas ofmanagement, operations and training. Thus, although during the preparationof the Plan all the items proposed for inclusion were scrutinized closely,these have been grouped together for purposes of cost/benefit analysis.

Costs

5.18 All investment in physical assets under the Plan have been allo-cated to freight and passenger services on the Java and Sumatra systems,either directly, in the case of freight and passenger cars, or in proportionto the relative amount of capacity which the investments will provide foreach service on each of the islands, in the case of locomotives and track.Investment in training and technical assistance has been allocated to thefour main groups of investment according to the assessed degree of improve-ment needed to achieve adequate standards of efficiency in each of therelevant areas of operation. Operating costs are projected at constantprices for each of the forecast levels of traffic volume (Table 15).

Benefits

5.19 The benefits arise from the reduction in costs in operation ofthe services, especially because of increased use of diesel traction, andfrom avoided costs of diversion of traffic to higher-cost modes of transportif the railway investment were not to be undertaken. In implementing thePlan, about 260 main line steam locomotives in Java and about 131 in Sumatrawould be retired from service, resulting in substantial cost reductions.Without the rehabilitation of passenger and freight cars, it would be neces-sary to purchase new cars to carry the level of traffic offered and expectedor divert the traffic to roads at a higher cost. Building up of adequate

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inventories which hitherto have been completely depleted would result inimproved maintenance and better availability of rolling stock. The substan-tial technical assistance to be provided will contribute to an all-roundimprovement in operational efficiency. The benefits described above do notinclude improvements in safety associated with investment in signalling,track, ballast, bridges, and to that extent the benefits are understated.

Rate of Return

5.20 The economic rate of return has been calculated for four groups ofinvestments. Over an assumed life of twenty years, the economic rate ofreturn would be:

Java Sumatra

Freight movement. 33% 29%

Passenger movement 14% 27%

The overall rate of return on the investment during the Plan would be 23%.Assuming that investment costs (rail and road vehicle) increase by 15%,the economic return would be 19%. If investment costs increase by 15%,railway operating costs incrdase by 15% and road transport costs decreaseby 15%, the rate of return wduld be 15%. These returns are satisfactory.Economic return calculations are shown in Table 15.

VI. AGREEMENTS REACHED AND RECOMMENDATION

6.01 During negotiations agreement was reached on the following principalpoints:

(a) the carrying out by PJKA of a comprehensive recovery planembracing:

- provision of technical assistance (paras 3.06 and 4.14);- strengthening of PJKA's organizational structure (para 3.07);- phased staff reductions (para 3.09);- modernization of accounting and establishment of traffic

costing (para 3.11);- improved operations (para 3.30); and- tariff revisions (paras 5.04 and 5.05),

which together will help PJKA to achieve an operating ratio of100 or better by no later than 1979/80 (para 5.10) (c));

(b) provision of funds by the Government for capital investment(para 5.08) and for adequate working capital (para 5.09).

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(c) action to compensate PJKA for losses on unprofitable linesretained in service (para 5.10) (a)).

6.02 The proposed Project provides a suitable basis for a Bank loanof US$48 million to the Government of Indonesia.

May 10, 1974

AliNEX 1Page 1

INDONESIA


Indonesian State Railways

Notes on the Organization and Management of PJKA

A. The Railway as a Corporation

1. By Presidential Decree (Peraturan Pemerintah) No. 22 of May 25,1963, the railways were organized as a Perusahaan Negara Kereta Api (PNKA),or statutory corporation under the Minister of Communications. Under thisdecree PNKA had powers to maintain its own budget, to raise funds, to sueand be sued, and was expected to operate on business principles and be fi-nancially viable. In practice, however, PNKA was not strong enough tostand on its own feet as a corporation: its revenues were barely sufficientto cover working costs and the Government's financial support was neededfor the maintenance of operations and for capital investment.

B. The Change to a Government Agency

2. In the circumstances outlined above, the Government decided tochange PNKA into a government agency or Perusahaan Jawatan Kereta Api(PJKA), and a Presidential Decree No. 61 was published to this effect onSeptember 15, 1971. As a government agency, although without legal personalityPJKA has its own management and accounts and is to have a separate sectionof the national budget, with its accounts kept separate as distinct froma government department. The accounts will not be ready for inclusion in thestate budget until fiscal year 1974/75, beginning April 1, 1974.

3. The conversion of the railways into a government agency is, ineffect, legalizing a position which already existed; and the change isbeing made easier by the fact that the terms and conditions of service ofthe railway staff are in line with those of the Government. The only materialalteration - which has already been made - has been to abolish the Board ofDirectors (consisting of the Chief Director and four technical Directorsresponsible for the day-to-day management of the railway) and vest the powersof the Board solely in the Chief Director. The powers of the Minister andhis responsibility to provide railway services to the public through PJKAremain unaltered, and the Government has indicated (a) that it wishes PJKAto operate commercially and become financially viable as soon as possible;and (b) that given the achievement of this goal, it would consider changingthe railway back to corporation status.

ANNEX 1Page 2

C. Relations of PJKA to the Government

4. The relations of PJKA to the Government are shown in Chart Ato this annex. The Minister .of Communications in addition to having respon-sibility for the railways is In chargd of road transportation (excludingroad construct:ion), sea transport and ports, inland waterways, aviation,telecommunications and tourism. In exercise of his responsibility for PJKA,the Minister gives directions of a general character, controls both thecapital and working expenditure budgets (in conjunction with the Ministersof Finance and of the National Planning Board), and sets the upper limitsof rates and fares. He exercises these powers directly or through aDirector General of Land Transport and Inland Waterways.

D. Powers of the Management

5. Responsibility for the day-to-day management of PJKA is vested ina Chief Director, appointed for a period of five years, who reports to theMinister through the Director General of Land Transport. The powers ofthe Chief Director are circumscribed in relation to senior staff appoint-ments, changes in staff policy, the authorization of capital expenditure,changes in budget allocations already authorized, and increases in tariffs.In general, however, apart from some physical difficulty arising fromhaving the Headquarters of PJKA at Bandung, 189 km from the seat of theGovernment at Jakarta, communication between the Chief Director, the DirectorGeneral of Land Transport and the Minister is good and the limitation ofthe Chief Director's powers is reasonable in relation to PJKA's status asa government agency.

E. Organization of PJKA

6. Organizationally, the railway is divided into six regional divi-sions (three in Java and three in Sumatra) called the Eksplotasi and 15 sub-divisions of technical staff called the Inspeksi. The organization support-ing the Chief Director (Chart B to this annex) consists of four Directorsat Headquarters with responsibility for the operations of all railwayactivities shared departmentally between them; six Chiefs of Ek8plotasi(Divisional Managers) and 15 Inspeksi (sub-divisions of the technicalstaff). The Chiefs of Eksplotasi report directly to the Chief Director andthe Inspeksi go for guidance to the functional departments at Headquartersunder the four Directors. This divisional organization, which delegatesconsiderable management responsibility and status to the Chiefs ofEksplotasi, has its justification in the geographical spread of the systemover two islands (Java/Madura and Sumatra) spanning some 3,000 km and inthe previous history of sectionalism and regional independence (up to1945, when there were 13 different railway companies, including the StateRailway).

ANNEX 1Page 3

F. Weaknesses in the Organization

7. Overall, the support organization outlined above works reasonablywell but distances and poor telecommunications cause some difficulties tothe central management in coordinating all aspects of the railways working.Efforts are being made to improve this situation through the provision ofbetter telecommunications (to be extended under the Railway Five Year In-vestment Plan) and the introduction of operational changes such as central-ized wagon control.

8. Other weaknesses are: a shortage of experienced staff in themiddle and lower ranges of management; a lack of adequate operational andfinancial data for day-to-day management; an inadequate accounting system.There is also need for traffic costing to provide a basis for tariffadjustments and investment evaluation; and there is a lack of stores exper-tise in forecasting the spares and other material needs of PJKA and in takingtimely action to see that these needs are met.

9. The organizational structure of management also needs strengthening- a process which has already begun. Until recently, one Director (forOperating/Transportation) had responsibility for all civil engineering (wayand works), for locomotive running, for traffic operations, for signallingand telecommunications and for ferry services. This is too wide and diversea span of work to be covered by one officer. Responsibility for locomotiverunning has now been transferred to the Director responsible for locomotiveworkshops/maintenance and consideration is being given to setting up aseparate "fixed installations" or civil engineering directorate, which wouldalso assume responsibility for signalling and telecommunications. Thiswould leave one Director to concentrate on operations and commercial services.Proposed changes to central management designed to give closer, more spe-cialized and efficient control, are below.

G. Proposed Changes in Management and Organization

Present Proposed Principal Areas of Control

Director Personnel Director Personnel Personnel; training; welfare

Director Commerce Director Finance Accounting; internal audit;statistics; costing

Director Operating/ Director Transpor- Trains; ferries; tariffs; marketing;Transportation tation claims

Director Civil Way and works; signalling andEngineering and communications

Director Supply/ Director Mechanical Workshops; depots; traction;Workshops Engineering electrical engineering

Director Stores Stores purchase and issue;inventory control

Additionally there is need to ensure that the Chief Director's Office has adequateexpertise for research and planning and investment evaluation purposes. Therecent appointment of two economists is a step in this direction.

INDONESIA


INDONESIAN STATE RAILWAYS

Chart of Relation of PJKA to the Government

MINISTER OF COMMUNICATIONS

| SECRETARY GENERAL

DIRECTOR GENERAL DIRECTOR GENERAL DIRECTOR GENERAL DIRECTOR GENERAL DIRECTOR GENERALPOSTS & 'TELECOM- AIR COMMUNICA- LAND TRANSPORT/ MARINE COMMUNICA- TOURISMMUNICATIONS TIONS INLAND WATERWAYS TIONS

CHIEF DIRECTORPJKAl

1/ The Director General, Land Transport and Inland Waterways, has supervisory responsibilities forroad transport (excluding road construction and maintenance), inland waterways and urban transport

as well as for the railways.

Source: PJKA and Bank mission staff.February 1974

TNDONESIA


TNDONESIAN STATE RAILWAYS

Chart of Present PJKA Organization

Chief DirectorOffice of Chief Director - Research,

Planning, Control

Director of Personnel Director of Commerce Director of Operations/ Director of Mechanical Eng/Director ~~~~~~Transportation Sup I

Chief Chief Chief Chief Chief Chief Chief Chief Chief Sig- |Chief Chief Chief ChiefPersonnel Education Welfare Commerce Audit- Finance Way & Opera- nalling & Ferry Traction Work- Supplies

Training ing Works tions Communicat. Service shops

Chief of Eksplotasi (6)

West Java/Jakarta North Sumatra/Medan

East Java/Surabaya South Sumatra/PalembangCentral Java/Semarang West Sumatra/Padang

NOTE: Eksplotasi - Regional DivisionInspeksi - Technical Sub-DivisionSeksi - Working Supervisory Unit

Inspeksi (15)

Way i|Signalling and Traction Operating | and Others

Works Commun ications !e

Seksi (88)1 Depots Stations ^Seksi (28)

Source: PJKA and Bank nission staff,

February 1974

ANNEX 2Page 1

INDONESIA


Outline of (A) Training and (B) Technical Assistance Proposals

A. Training

Consultants' (DECONSULT) Proposals

1. The Railways' needs for training were examined in 1972 by consult-

ants (DECONSULT, Germany), who recommended:

(a) for general railway training - the enlarging of theexisting training schools at Bandung and Jogjakartafrom 250 study and bed places to 775 study and 650bed places;

(b) for mechanical workshops and depot training - the

provision of training facilities near the main work-shops of Mangarrai (Jakarta), Jogjakarta andSurabaya and, for Sumatra, at Palembang;

(c) for permanent way training - the provision of aspecially equipped and manned train to travelround the system and train staff on the job;

(d) for management training - the building of a staffcollege, possibly in Bandung; and

(e) for teacher training - the financing of technical

assistance.

The consultants estimated the implementation of their proposals

to cost US$2.15 million in foreign exchange and Rp 1.6 billion (US$3.85 million)

in local currency, and the proposals have been accepted in principle by

the Government and PJKA.

Normal Recruitment

2. PJKA has no difficulty in recruiting elementary and secondary

schoolboys and students from technical institutes with the required standards

of education. PJKA, however, does have difficulty in getting university

ANNEX 2Page 2

graduates, particularly those with engineering qualifications (civil, mechanicaland electrical) because the initial pay and prospects with the railway arenot so good as in commerce, particularly in the oil industry.

3. With regard to recru'tment at the lower levels, an unusual featureis that Government regulations do not allow the employment of boys beforethe age of 18. As many boys eligible for railway work leave school at agesup to 15, there is an awkward gap to be filled at a formative age. It isfilled to some extent by technical institutes.

Exceptional Recruitment

4. To meet exceptional requirements related to the ongoing pre-mature retirement of staff, PJKA is making wide use of (a) advertisements;(b) the Office of Manpower Placements; and (c) the Department of Education.Special selection arrangements have been set up and extensive use is beingmade of Indonesian Army facilities for selection and pre-service training.

B. Technical Assistance Program

A summary of the estimated costs of technical assistance for theperiod 1974/75-1976/77 is given on page 5 of this annex. The proposals aresummarized below:

(a) Mechanical workshops and depots - Teams of mechanicalspecialists, versed in modern workshop practice andproduction planning and control, to work in the shopsand depots to obtain the maximum benefit from theimproved facilities created by the investment. Proposed:Estimated periods of assistance will be for two years;the teams of specialists are to include one mechanicalengineer of wide experience, at headquarters; twospecialists, one senior and one junior, in each of themajor shops at Jogjakarta and Mangarrai; one seniormechanical engineer at Surabaya; and one specialist(junior mechanical engineer level) to work at each ofthree depots in Java and Sumatra. Nominated counterpartsto be provided in all cases.

(b) Track rehabilitation and maintenance - track engineers andinspectors to be made available to work with the Inspeksiand the Eksplotasi in the major task of setting standards andensuring sound rehabilitation and systematic track maintenance.Proposed: Estimated periods of assistance will be three years.One civil engineer of wide experience, at headquarters, andthree senior and six junior specialists for the three Eksplotasiin Java, to work alongside qualified counterpart staff.

ANNEX 2Page 3

(c) Statistics - there is a lack of adequate statistical andfinancial data for management control and planning purpose.Expert assistance is required to determine the statisticsneeded and the most economical and effective methods ofsecuring their timely and accurate production. Proposed:One railway statistics specialist posted at PJKA headquartersfor a period of one to two years to advise and help imple-ment changes and to train his Indonesian counterpart(s).

(d) Accounting - there is a need to update and improve theaccounting system in general and in particular theclassification of accounts and expenses in order that abetter basis can be provided for managerial and cost controland for traffic costing. Proposed: The assistance of afirm of international public accountants to be obtained fora period of about one year. Its task shall include trainingand advising Indonesian counterpart staff.

(e) Traffic costing and tariff preparation - there is a need toestablish a routine - which the staff of PJKA can maintainon a continuing basis - in the principles, processes andtechniques of traffic costing, to provide a basis for tariffadjustments and investment evaluation. Proposed: Onefinancial specialist (senior) for a period of about two years,and one specialist in tariff preparation for one year, employedat headquarters. Counterpart training will also be undertakenby the specialists.

(f) Operations - there is need for the progressive improvementof train and wagon control, time-tabling and the preparationof new manuals and regulations to cover operating practicesand for a study of the necessity for mixed train operations.Proposed: One railway specialist with wide operationalexperience, and one junior specialist, at headquarters towork for a period of about two years in conjunction withthree specialists in movement control, one in each Eksplotasiin Java.

(g) Stores - there is understocking of required spares andmaterials on PJKA, resulting in a loss of operational capacity.Financial constraints have contributed to this position,but there is also need for the reorganization of stores pro-cedures and methods of inventory control to ensure systematicforecasts and budgeting of needs and the initiation and follow-through of timely action. Proposed: One senior inventoryspecialist at headquarters for a period of about one year.

ANNEX 2Page 4

(h) Technical assistance and staff training - there is needfor an experienced railwayman to assist the Chief Directorin coordinating the technical assistance effort: he willalso oversee the expansion of training schemes.

(i) Planning - to assist the management in transportationplanning, investment analysis and project evaluation,one specialist to be employed at headquarters for a periodof two years.

(j) Overseas training - overseas training for selected PJKAstaff up to 800 man-months would be necessary. The training,which will be in all fields of railway operations, will giveemphasis to those techniques and practices appropriate toPJKA's system and technical requirements and to thoseactivities which are relevant to the implementation of therecovery plan.

PJKA should assign sufficient qualified and experienced staff towork on a full-time basis as the courterparts of the specialists referredto above and thus permit PJKA to reap the full benefits of their assistanceand training.

ANNEX 2Page 5

INDONESIA


1/Technical Assistance Programr- 1974/75 - 1976/77

Rupiah US$Million Million

1. Mechanical workshops and depots 589.30 1.42

2. Track rehabilitation and maintenance 1,423.45 3.43

3. Statistics 58.10 0.14

4. Accounting 136.95 0.33

5. Traffic costing and tariffs 99.60 0.24

6. Operations 352.75 0.85

7. Stores 99.60 0.24

TOTAL 2,759.75 6.65

1/ Includes local expenditure.

March 12, 1974

ANNEX 3Page 1

INDONESIA


Description of Railway Property

A. Track and Structure

1. Indonesian State Railways operate a system of 6,793 route-km (182 km

double track of which 55 km are electrified, on 1,500 volts DC) distributedin the islands of Java, Madura and Sumatra. The network functions as sixgeographically unconnected systems (Maps 10814 and 10815 distributed as

follows:

Location Gauge (millimeters) Route Length (km)

Java and Madura 1,067 4,741600 93

South Sumatra 1,067 644North Sumatra 1,067 542West Sumatra 1,067 263Aceh 750 510

6,793

2. The gauge is for the most part (6,190 km) 1,067 umn Of the total6,793 route-km, 4,552 km are main lines and 2,241 km are secondary feederlines. The most important lines are in the island of Java - 4,834 km of

which 2,792 km are main lines and 2,042 are feeder lines. About 20% of thetrack of the whole system is laid with heavy rails (41 kg/m and 41.52 km/m),

29% with medium rails (33.4 kg/m and 38.0 kg/m) and the balance of 51% withrails ranging from 25.7 kg/m to 30.22 kg/i. The sleepers are mainly ofhardwood with some of pressed steel troughs; sleeper density is 1,450 per km

on the main line and 1,250 on the branch lines. About 20% of sleepers on themain line and about 30/35% on branch lines are in poor condition. Ballastis of crushed stone or gravel. Although the minimum depth of ballast under thesleepers has been specified as 200 mm to 250 mm (8 in - 10 in) on the mainline and 150 mm (6 in) on the branch line, there is an acute shortage ofballast except on a few sections of Java main lines. The ballast that existsis mixed with soil and is caked up. The track fittings are old, mostly rigidtype; however, recently elastic and Pandrol types have been introduced. Due

to inadequate renewals, a large percentage of fastenings and some of the pointsand crossings need replacement. The current permissible maximum speed on themain lines in Java is 90 km/h but many speed restrictions exist due to thepoor condition of track. About 1,100 km of track has been welded (panels of85 m length). PJKA has plans to weld an additional 700 km of track.

ANNEX 3Page 2

3. The ruling gradient on the main lines is 1 in 100 on the plainsand 1 in 50 in hilly terrain. The permissible axle loads on the main linesof Java vary from 20 tons to 12 tons, but a large portion is fit for 15 tonsand over. The permissible axle load in South Sumatra is 13 tons and in NorthSumatra 11 tous. The maximum curvature is 8.75 degrees on the main linesand 11.3 degrees on the branch lines.

4. Maintenance of track leaves much to be desired. This is due notonly to inadequate renewals of rails, fittings, sleepers and ballast butto neglect of systematic maintenance over the past several years. There isheavy creep, and track has sunk in long stretches on the north line andon the Jakarta-Merak line in Java. Cleaning of ballast to ensure satisfac-tory drainage of the track bed has not been undertaken as a regular measurefor ensuring good track maintenance. The maintenance of bridge structuresis satisfactory; however, a program of strengthening and replacement of oldbridges for higher standards has been undertaken. Other structures areadequately maintained.

B. Signalling and Telecommunications

5. Most of the stations on the main lines with frequency of trainsof 12 or more per day are provided with signalling installations of Siemensand Halske type. Other stations are provided with mechanical signallingof differing older types. Out of the 396 stations in Java, 193 stationshave Siemens' system with 85 of them provided with section block. The other203 stations have the older systems of signalling. In Sumatra, out of 147stations (including 31 in West Sumatra) 24 stations have been provided withSiemens installations with no section block; the balance have Alkmar (60stations) and wood handle type (62 stations). For speeds of trains nowoperating especially in Java, the signalling system urgently needs modern-izing.

6. The present telecommunication network of PJKA for administrativecontrol and for limited collection of wagon particulars, consists of aradio network (HF-SSB) which links through a single side band the largeroffices like the headquarters, Eksplotasis (divisional offices) and theInspeksi (sub-divisions). The radio communication is possible only duringdaytime because of limited frequency allocation by the communication council.For other operational needs, the telecommunication system now depends onMorse telegraph (types T, B, A) and telephones (also types T, B, A). Fortrain dispatch work, on most important sections such as Cikampek-Bandungand Surabaya areas, additional sector telephones with selective callingare used. Modern teleprinter equipment is functioning on southern Javamain lines. Recently a radio train dispatch system between Jakarta andCirebon has been brought into commission. A good telecommunication systemis essential for control of train operations, wagon distribution and move-ment. PJKA have proposed a radio network connecting important centersof railway activity in Java together with a satisfactory and adequatesystem of train dispatch using a selector operated telephone system onexisting land lines. Such systems have been working satisfactorily onseveral railways in Southeast Asia under conditions similar to those inIndonesia.

ANNEX 3Page 3

C. Workshops and Depots

7. PJKA has 7 mechanical workshops (5 in Java and 2 in Sumatra)for the overhaul, repair and maintenance of locomotives and rollingstock. They are:

(Mangarrai (Jakarta) - Passenger Cars (steel body)(Surabaya - Freight Cars

Java (Jogjakarta - Diesel Locomotives(Madiun - Steam Locomotives(Samarang - Passenger Cars (wooden body)

Sumatra)(South)) Lahat - General - for all types of stock.

Sumatra) Medan (Palubrayan) - General - for all types of work.(North))

8. All the workshops except the one at Jogjakarta are very old.Many of the machines still have belt drive from counter-shafting. Out of1,600 items of serviceable machinery and equipment, 680 items are over 30years old. The workshops are also deficient in adequate handling facilitiesand tools and gauges.

Mangarrai Shop (near Jakarta)

9. This workshop has to repair and maintain about 1,000 passengercars (steel body). The output in the past has been only about 250 coachesper annum. This low output is partly due to lack of spare parts and partlydue to poor equipment. PJKA proposes to modernize the workshop to enableit to increase output to about 500 passenger cars per annum. Productionplanning, controls and methods also need to be greatly improved.

Surabaya Shop

10. PJKA's workshop at Surabaya is a large unit handling the overhaul,repair and maintenance of its freight car fleet in Java. It carried outperiodical and unscheduled repairs to about 2,600 freight cars in 1972.The capacity needed is about 4,000 wagons p.a. By the addition of some itemsof equipment like wheel set lathe, wheel set press, axle shaft lathe,welding machines, forklift truck and overhead travelling cranes, and withsome technical assistance, it would be possible to improve the productionto required levels and reduce the repair time in this workshop.

Jogjakarta Shop

11. This shop, which repairs and overhauls diesel locomotives, is byfar the best of PJKA's workshops. However, for improved production, notonly for the periodical overhaul of about 380 diesel locomotives but forovertaking the huge backlog in rehabilitation of the large number of groundedlocomotives (69 in Java), this workshop needs additional machine tools andmodernization. During 1972 the outturn of periodical overhauls was only

ANNEX 3Page 4

37 locomotives with a large number (255) of unscheduled repairs of thelocomotives. The practice of bringing locomotives to the shop for repairswhich normally are carried out in well organized depots in other countriesis wasteful. PJKA proposes to remedy this by adopting partial unit replace-ment techniques and through better stocking of spare parts in depots. Therequired out-turn from Jogjakarta whrkshops is about 80 periodical generaloverhauls per annum, together with about 190 biannual intermediate overhauls.Through the acquisition of some machine tools including a balancing machine,a spring rolling machine, welding machine, grinding machine for collector,a 2,500 hp hydraulic brake test equipment and a few fork lift trucks, PJKAproposes to increase the production in this workshop to the required level.Introduction of better production methods and progress planning, throughtechnical assistance, are essential to achieve this.

Madiun Shop

12. This workshop carries out repairs and overhaul of steam locomotivesin Java. The holdings of steam locomotives of PJKA is expected to decreaserapidly and the activity in this workshop will diminish according to thepace of dieselization of motive power. The machinery and equipment in theworkshop are very old. Some serviceable items like lathes and milling andother machines, together with part of the sheds, with modifications, will beused in the scheme for the setting up of a permanent way rehabilitationworkshop.

Lahat and Medan (Palubrayan)

13. These workshops in South and North Sumatra are general purposesrailway worlkshops handling the repairs, overhaul and maintenance of steamand diesel locomotives, and freight and passenger cars. The equipment isold; but except for minimal additions to equipment for the better maintenanceof diesel locomotives PJKA does not have plans for investments. The dieselsections of these workshops can undertake normal overhaul operations ofdiesel locomotives if adequate supplies of spare parts and major componentsare made available from the parent workshop at Jogjakarta.

i3ridge Shop (Bandung)

14. PJKA owns a bridge and structural fabricating workshop at Bandungwith a capacity of 1,000 tons of steel bridge girders per annum. The replace-ment program of old and weak bridges and miscellaneous fabricated steelstructures of the railways needs the expansion of the existing facilitiesto increase the production to 2,000 tons per annum.

Leo ts

15. PJKA has 35 depots for locomotives and cars spread over the system.Most of them, especially the diesel locomotive depots, are ill equipped anddo not have many necessary types of equipment like lifting jacks, tools andgauges. This has resulted in throwing additional burden on the main dieselworkshop in Jogjakarta. PJKA proposes, in addition to stocking adequatespares and components in the depots, to equip them with the necessary

ANNEX 3Page 5

facilities for efficient day to day maintenance Of the locomotives. Thedepots for passenger and freight cars will also be adequately equipped withbetter tools and handling facilities and a stock of spare wheel sets toensure minimum detention to rolling stock in the depots.

D. Motive Power and Rolling Stock

16. rhe details of the fleet of locomotives and rolling stock of PJKAwith their ages are given in Table 2. In brief, the holdings as of June 1973were:

Locomotives

On Books Percentage/a Mainline Shunting Total In Service In Service

Steam 388 182 570 334 59Diesel 174 137 311 206 66Electric 11 - 11 4 36Diesel Railcars 10 - 10 4 40

Passenger Cars b

In Units/c 2,497 1,029 41/-

Freight Cars

In Units 22,279 11,104/e 50

In terms of four wheelers (2 axles) 24,660 12,682/e 51

/a Includes branch line operation./b Includes inspection cars, dining cars other coaching vehicles./c Bogies 2,184 + 313 four wheelers./d Excludes 1,468 awaiting scrapping./e Excludes 11,175 units (11,978-2 axle) awaiting scrapping./f 73% if cars awaiting scrapping but still in partial service are

considered as in service.

Out of the total 570 steam locomotives 284 are in poor condition;73 diesel locomotives out of a total of 311 diesel locomotives are out ofcommission stabled in the workshops due to lack of spare parts and components.Only four out of 10 diesel railcars are serviceable, also due to insufficientspare parts. Out of 1,029 (excluding 1,468 awaiting scrapping) serviceablepassenger cars, 370 passenger cars are under or awaiting repairs. A largenumber of passenger cars awaiting scrapping have wooden bodies; 1,436 carsare over 40 years old.

17. The freight car holding of PJKA is 24,660 in terms of four wheelers(2 axle) of which 15,167 (in terms of,2 axle cars) are over 40 years old.About 6,800 cars have been stabled in yards and sidings impeding mobility.

ANNEX 3Page 6

Some of the old cars are used for carrying departmental traffic and forcommodities like stone, sand and other building material while moving shortdistances. A systematic scrapping and disposal program of the old freightcars is necessary to clear the yards and sidings.

E. Marshalling Yards

18. The main freight marshalling yards in Java are at Jakarta andSurabaya. They each handle 700-750 cars per day. These two terminal yardsand the intermediate yards at Cikampek, Cireb,on, Samarang and Bandung haveadequate capacity for future traffic. Mobility in the yards will improvewhen the stabled wagons are cleared away. The marshalling yards in northand south Sumatra are adequate for the level of traffic expected for someyears to come.

ANNEX 4Page 1

INDONESIA

APPRAISAL OF A RAILWAY PROJECr

Traffic Trends and Forecasts

A. Freight Traffic

1. About 82% of PJKA's traffic (ton-km) is carried in Java and thebalance equally in North and South Sumatra. PJKA's revenue earnings, freighttraffic statistics for 1962 and from 1966 through 1972 are shown in Table 3.From 1962 through 1966 freight traffic declined on the average by 7.5% p.a.(compounded) in tons and 5.3% p.a. in ton-km. This decline was the result ofpoor quality of railway service, increased competition from road transportfor short hauls, and reduced production of rubber, coffee and coal.

2. Since 1967 the traffic has tended to increase due to the improvedeconomic climate and as a result of modest additions to rolling stock. From1968 to 1972 freight traffic grew at the average rate of about 8.5% p.a. intons and about 9% p.a. in ton-km. This pattern of continuing growth infreight traffic has been maintained during 1973 (7.9% in tons and 7.3% inton-km - Tables 4 and 5), increasing from 4.56 million tons to 4.92 milliontons, and in terms of ton-km from 1,038 million to 1,112 million. In Java,the percentage increase during 1973 was even higher (10% in tons and 9.5%in ton-km - Table 4). During the period 1966-72 the average haul of import-ant commodities like kerosene, gasoline, cement, soya beans, timber andmiscellaneous goods declined from 210 km to 170 km. This was offset somewhatby increases in the lengths of haul for rice and sugar.

3. The traffic density on PJKA (964,400 traffic units per main lineroute-km) is relatively low, even making allowance for the high percentageof branch lines on the system. 1/ However, freight net ton-km per route-kim improved from 126,680 in 1966 to 163,700 in 1973.

4. A summary of the commodity-wise traffic for 1962 and 1972 shownin Table 3 indicates some change in its composition during the period:

1/ Traffic unit = Ton-Km + Pass-Km - Main lines 4,550 km.

ANNEX 4Page 2

1962 1972

Tons % Ton-Km % Tons % Ton-Km X

(O000) (million) ('000) (;illion)

Sugar 322 7.3 50.7 5.0 122 2.7 53.3 5.1

Rice 315 7.1 57.9 5.6 111 2.4 39.1 3.8

Rubber 109 2.5 21.9 2.1 46 1.0 10.9 1.1

Other Agricul-tural Products 267 6.0 62.7 6.1 281 6.2 89.4 8.6

Sub-total 1,013 22.9 193.2 18.8 560 12.3 192.7 18.6

Petroleum andOil Products 391 8.9 72.6 7.1 888 19.4 151.9 14.6

Forest Products 483 10.9 101.8 9.9 331 7.3 72.5 7.1

BuildingH4aterial 458 10.4 119.6 11.6 836 18.3 124.1 11.9

Other Mis-cellaneousGoods (in-cluding Fer-tilizers) 2,072 46.9 542.2 52.6 1,947 42.7 496.1 47.8

Total 4,417 100.0 1,029.4 100.0 4,562 100.0 1,038.4 100.0

5. The proportion of agricultural products, forestry products and

miscellaneous traffic was lower in 1972, while the share of petroleum andoil products and building material increased. Short and medium haul traffic

in these categories was obviously diverted to other modes of transport.The increased percentage of building material is largely accounted for by

short-lead traffic in sand and stone which is not attractive for road

trucks. For the period 1974 through 1979, the composition of rail traffic

is expected to remain basically unchanged except for a drop in the propor-

tion of traffic in oil and oil products (due to the construction of oil pipe

lines) and an increase in the proportion of agricultural and forestry products.

6. The commodity-wise analysis of future traffic made by the con-

sultants (DECONSULT), taking into account the projected developments in

the industrial, agricultural and other fields, placed the rate of growth of

freight traffic for 1972 through 1979 at 6.25% p.a. in Java, 7% p.a. in

North Sumatra and 9% p.a. in South Sumatra. Table 6 shows mission's fore-

casts of PJKA's freight traffic from 1974 through 1979. These forecasts

are mainly based on the study by DECONSULT but have been adjusted downwardexcept for Java) in consultation with PJKA. For the whole of PJKA system

the average overall annual rate of growth for the period 1973 through 1979 will

be about 5.5% in tons, and in terms of ton-km slightly less (about 4.9%).The rate of growth expected in the initial years will be lower (about 4.5%),

stabilizing at about 6.25% as the benefits of the Government's measures for

development in the fields of agriculture, forestry and industry are relized.

ANNEX 4Page 3

7. The traffic is expected to increase in timber, fertilizers,sugar, rice, building material and general goods, while there would bea decrease in the traffic in kerosene, and gasoline (due to the projectedconstruction of pipelines). In Java, the increase in rice and sugar trafficis the result of demand of long-haul transport expected for movement fromsurplus regions of East and Central Java to Western Java and to the Portof Surabaya for export. The rail movement of fertilizer in bulk from portsto warehouses is likely to increase substantially. Freight traffic develop-ment in Sumatra is expected to grow at a higher rate (7% p.a.) because ofthe long hauls.

B. Passenger Traffic

8. About 90% of PJKA's passenger traffic (pass-km) is carried inJava, with about 7.6% in South Sumatra, and the balance in North and WestSumatra. Table 7 shows the PJKA's passenger traffic from 1962 through 1973. -/

During this decade the passenger traffic decreased, especially during theyears subsequent to 1966 when it declined at an average rate of about 8% p.a.to 4.1 million passengers and 3,352 pass-km in 1972. Reasons for the declinewere: the growing competition from road transport including "civic missions"

by the military, the poor and unreliable service offered by the railways (dueto deterioration of track and rolling stock), reduction in operations onbranch lines, and the cancellation of some commuter services because of non-availability of locomotives and passenger cars. During 1973 there was afurther sharp drop of about 28% in the number of passengers carried from40.1 million to 28.8 million. This was the result of further deteriorationin train services, coupled with a substantial increase (about 30%) in basicpassenger fares introduced in May 1973. The increase in passenger faresdiscouraged short-distance passenger traffic. Overall passenger revenue in1973, however, increased.

9. In forecasting the level of passenger traffic in 1979, DECONSULTconsidered expected population and income growth, the trends of developmentof higher-class traffic in Java and the general improvement in the qualityof service expected from rehabilitation of the main lines of PJKA. Theconsultants concluded that passenger trips could grow at an annual rate of3% over the 1972 level in Java and North Sumatra and at 5% in South Suatra,with a higher rate of growth in terms of pass-km because of the anticipatedincrease in the average length of Journey of the higher class passengers inJava.

10. In the light of the sharp drop in 1973 of passenger traffic,the mission substantially modified estimates in consultation withPJKA. Table 7 shows the forecast of PJKA Passenger Traffic for the period1974-79. As against 40.1 million passengers and 3,352 million pass-km

1/ The traffic statistics do not include ticketless passengers and thelarge number of passengers who travel on freight trains. DECONSULTestimated that about 7.5% of passengers do not buy tickets.

ANMEX 4Page 4

carried by PJKA in 1972, the forecast for 1979 is placed only slightly higher,at 40.4 million passengers and 3,724 pass-km. Due to long neglect withpractically no repairs or improvements to its assets, the passenger serviceson PJKA have progressively deteriorated. Even so, the railway in Indonesiais a major carrier of long-distance passengers, and many of the servicesare overcrowded. With the rehabilitation of track and passenger carsensuring more regular and speeded up passenger services and with bettercontrol of ticketless traffic and elimination of unauthorized travel onfreight trains, it is reasonable to expect passenger traffic to recover,especially for long distances.

11. The mission considers that during the period 1974-79 passengertraffic will grow from the low level of 1973 at an average rate of about5.75% p.a.1/ However, for the first year, when the full besefit or rehabili-tation would not be available, the growth will be smaller, at 3.75%. It isexpected to stabilize at about 2% p.a. in 1979.

1/ During negotiations the Bank was advised of a recent Government decisionto use PJKA, for reasons of safety and orderly transportation, formovement of all passengers under the Transmigration Program from East andCentral Java to Sumatra.

ANNEX 5Page 1

INDONESIA


Investment Plan 1974/75 through 1978/79 - Main Items

1. Rehabilitation of North Line (Jakarta - Samarang - Surabaya)(7.5% ofTotal Expenditure)

Based on a study carried out by Japanese consultants, the Governmenthad approved the re-laying of the entire route known as the North Line fromJakarta to Surabaya (725 km) with R14A rails (42.18 kg). The track was tobe laid on wooden sleepers with additional ballast and made fit for speedsup to 100 km/h. The bridges were also to be strengthened. Part of thescheme, namely the Jakarta - Cirebon section (207 km), has recently beencompleted. Of the balance of 518 km the plan provides for extending thelayihg of R14A rails and strengthening the bridges on 165 km which togetherwith 48 km of track strengthened a few year ago, will cover section Cirebon- Samarang. This section carries more traffic than the section Samaraug -Surabaya. The scheme for relaying of track beyond Samarang will be deferred,but improved maintenance through lifting of track, provision of additionalballast and replacement of worn fittings will be carried out as a measureof safety for maximum permissible speeds of 80/90 km/hr. -

2. Rehabilitation of Main Line Track Other than North Line (29.6% of TotalExpenditure)

Except for a few sections in Java, the track on main line in Javaand Sumatra is in very poor condition. Lack of funds, for replacement ofworn track material and for adequate maintenance during the past 25 years,has caused progressive deterioration in its condition. Severe restrictionslimiting the maximum permissible speed to between 40 and 55 km/h have beenimposed over fairly long stretches on the main line in Java. In one stretchof 20 km between Bandung and Kroja the speed has been limited to 20 kmn/hbecause of the worn condition of the rails. The Plan provides for rehabilita-tion of the following sections of the main lines in Java:

(a) Cirebon - JogJakarta - Surabaya,

(b) Bandung - Kroja,

(c) Jakarta - Merak,

(d) Kalisat - Banjuwanji, and

(e) Malang - Bitar.

As a mPAsure of ensuring safety in operation, replacement ofunserviceable sleepers, track fittings, and renewals of worn crossings andswitchings will be undertaken on other sections of main lines in Java and

ANNEX 5Page 2

North and South Sumatra. Broadly, the Plan provides for renewal of about102 km rails, 1.35 million sleepers, fastenings for 1,670 km of trackwherever defective or missing, 2.8 million m3 of ballast, 262 sets ofcomplete turnouts, and defective switches and crossings. The improvementof track drainage, repairs to bridge piers and welding of 650 km of tracksalso form part of the rehabilitation operations.

3. Tools and Plant for Track Maintenance (1.9% of Total Expenditure)

The permanent way maintenance gangs are not fully equipped withsimple tools like track gauges, spirit levels, ballast rakes, track liftingjacks, beaters, crow bars and track spanners. Besides equipping the gangswith the full complement of tools required for systematic maintenance oftrack, it is necessary that a track repair workshop at Madiun be set up andequipped with adequate plant for carrying out repairs to points and casings,cropping, strengthening and welding of rails and repairs to steel sleepers.The necessary plant will include handling equipment including an overheadtravelling crane and a portal crane. In view of the large quantity ofballast required for rehabilitating track on the main lines, production ofballast by manual labor will be supplemented by production from two mechanicalcrushers owned and worked by PJKA. The Plan provides for the procurementof the tools and plant described and for the setting up of the track repairworkshop at Madiun, utilizing part of the facilities released from the steamlocomotive workshop.

4. Rehabilitation and Improvement to Signalling (4.5% of Total Cost)

Except for the sections of Jakarta - Bogor, Cikampek - Bandung,Surabaya - Malang and Jakarta area, where the train services are frequent,the main lines of PJKA system are equipped with old and obsolete type ofsignalling which need renewal. For the permissible speed of 80 - 90 km/hit is necessary, not only for safety of operation but for improved trainworking, that the standard of signalling be upgraded. The Plan provides forinstalling Siemens-Helskie type with tokenless block instruments on the mainlines of Java and some sections of Sumatra. Eighty percent of this mechanicalblock system can be manufactured locally with imported material like signalwire, signal/point levers and shafts for lever frames, electrical plungerlocks and block instruments. Improved signalling will be provided for 157stations on Java main lines and 33 stations in Sumatra.

5. Improvement to Telecommunication and Train Dispatch System (2.6Z of theTotal Expenditure)

There is urgent need for better train and wagon control arrangementsthroughout PJKA system and for better communications between the headquarters,the "Ekplotasis", important railway yards, workshops and other centers ofactivity. To achieve this, a UHF radio link with carrier frequency shouldbe set up; the general telephone networks at the headquarters and otherimportant stations should be improved and adequate teleprinter exchangefacilities, and a selector operated network on existing lines to serve a traindispatch system installed. The Plan provides for a radio link connecting

ANNEX 5Page 3

the important centers like Cirebon, Samarang, Surabaya, Cikampek, Bandung,Surakarta, Jogjakarta and Madiun. (Jakarta, Cirebon and Baduang are alreadyon a radio link recently installed.)

7. Improvements to the general telephone networks in Jakarta, Bandung,Samarang, Surabaya, Jogjakarta and Madiun areas are required; also establish-ment of a teleprinter network with, in Java, a single unit automatic tele-printer exchange with capacity of 30 subscribers and voice frequency tele-graphy equipment; for Sumatra subscriber equipment is required; all theseform part of the Plan. A train dispatch and control system with selectoroperated network on existing line wires covering all the =ain lines of Javais included in the Plan. Such train dispatch and control systems are foundto be adequate and are working satisfactorily in countries where conditionsare similar to those prevailing in Indonesia. The renewal of worn outcontroller equipment on some of the sections like Cikampek - Bandung - Banjar,Cirebon - Samarang - Surabaya, Samarang - Surakarta - Nadiun - Surabaya alsoform an important part of the plan.

6. Extension of Dieselization (12.2% of Total Expenditure)(Rehabilitation and Procurement of Additional Diesel Locomotives)

PJKA's motive power consists of 570 ateam locomotives (including182 shunting), 311 diesel locomotives (including 137 shunting), 11 electriclocomotives and 10 diesel rail cars. Because of heavy arrears of repairsdue to lack of spare parts (and the consequent resort to extensive cannibali-zation) the availability of main line locomotives is extremely low - 60% steam,59% diesel, 37Z electric and 40% rail cars). A total of 444 steam locomotivesare over 30 years old and 160 are over 40 years old; 94 steam locomotivesare earmarked for scrapping. During the Plan, old steam locAoetives will bephased out, 59 diesel locomotives rehabilition, and 60 new diesel locomotivesacquired. All the main line services in Java will have been dieselized by1979, resulting in the withdrawal from service of about 260 stem locomotives.At the same time, the steam locomotive fleet of 200 in Sumatra will be reducedby 130 locomotives (pages 7 and 8 of this Annex.)

7. Rehabilitation of Existing Diesel Rail Cars and Acquisition of New Dieseland Electric Rail Cars (2.6% of Total Cost)

PJKA own ten diesel powered rail cars. Due to lack of spares andcomponents, six of them are out of service. Rail car services are popularand the plan provides not only for the rehabilitation of the old diesel cars,but the procurement of 10 electric car sets of one power car and one trailereach, and 12 diesel car sets of two cars each. The new rail cars will beoperated between Jakarta - Bogor (electric), Jakarta - Cirebon and Jakarta -Merak (diesel). The old rehabilitated diesel rail cars will continue to workin Jogjakarta region.

8. Rehabilitation and Acquisition of Passenger Cars (6.6% of Total Cost)

PJKA have on their books, 2,184 bogie and 313 four wheelerpassenger cars (Table 2). Of these, about 1,000 cars, mainly of wooden

ANNEX 5Page 4

body construction, are over 50 years old and 1,437 are over 40 years old;361 cars procured in 1951/52 have been out of commission over a long period;they are badly corroded. The Plan provides for the scrapping of about 1,040passenger cars (mainly wooden body) and the rehabilitation of 290 steel bodycars including equipping then with air brakes.

The'availability of passenger cars which at present is only 73%(as compared with the generally accepted norm of 90%) will be improved to90%. When workshop facilities are modernized and spare parts are readilyavailable. The utilization of the fleet will also be improved when the largenumber of mixed trains on the main lines is reduced and passenger servicesare rationalized and run with greater efficiency as contemplated in thePlan. On the basis of these improvements, page 10 of this Annex showsthe details of the requirement of passenger cars to the end of the Planperiod after allowing for the scrapping of unserviceable cars. It will beseen that, besides rehabilitating 290 cars and diesel rail cars, theprocurement of 61 passenger cars (third class) and 22 sets of rail cars(one power car and trailer each) is necessary. The required investment isincluded in the Plan.

9. Freight Cars (8.1% of Total Cost)

The total number of freight cars (2 lxle and 4 axle) an the booksof PJKA in 1973 was 22,279 (24,660 in terms of axle cars). (See Table 2.)Of these 14,807 (15,167 in terms of 2 axle) are 40 years old or over. Oldwagons have not been taken off the books under a regular scrapping program,but a large number (estimated presently at about 6,800) are stabled and notactually in use. Including these, PJKA proposes to scrap 11,175 freightcars (11,978 in terms of 2 axle cars - 9,000 by 1976/77). A further 1,000wagons could be expected to be scrapped by 1979, retaining in service 10,104cars (11,682 in terms of 2 axle cars). As a result of improvement to repairfacilities, the present bad repair ratio of 10% will be reduced to 5S. Betterwagon control and reduction in terminal and yard detentions will result inbetter utilization of available freight cars. The average set train loads offreight trains will be improved from the present 111.0 tons (Java) to 162tons in 1979. Car-km per car day will be improved from 52.3 km (Java) to56 km in 1979. Car turnaround will be reduced from 8.3 days in 1973 to7.3 days in 1979 (Java). On the basis of these improvements PJKA'srequirements of additional freight cars by 1979 will be 300 bogies (600 -2 axle cars) including 120 ballast Hopper cars (see page 9 of this Amex).In addition to the procurement of 300 bogie freight cars, the Plan providesfor the improvements to the freoight car fleet for achieving better freighttrain operation. A total of 7,500 freight cars procured after 1957 will befitted with air brakes; of these 670 which now have hook couplers will beequipped with automatic couplers (the rest are already so fitted).

10. Rehabilitation and Improvements to Workshops and Depots (3.2X of TotalCost)

The equipment, tools Rnd handling facilities in the,three majorworkshops in Java at Jogjakarta (for diesel locomotives) Mangarrai (forpassenger cars) and Surabaya (for freight cars) need urgent odernisation.

ANNEX 5Page 5

These three workshops will in future handle all the repair work on locono-tives and rolling stock of PJKA. The percentage of main line diesellocomotives out of commission due to inadequate repair facilities compoundedby inadequate spares held in workshops and depot is 31%; a normal figurewould be 15%. Of the serviceable freight cars (excluding stock to be scrapped)about 10% is under and awaiting repairs; a normal figure would be 4-5%.The general availability of passenger cars (excluding those stabled for along time due to heavy corrosion needing extensive rehabilitation) is about83%; a normal figure would be 90%. To improve the situation and to bringdown the bad repair ratio to normal levels, the Plan includes the replace-ment of worn equipment and the procurement of some additional machine tools,handling and testing equipment, welding sets and compressed air facilities.The diesel depots which have inadequate facilities will be modernized bythe provision of lifting jacks, air compressors, cranes, testing equipmentand adequate tools. For expediting the repair operations in workshops anddepots, through until replacement, some major components like engines, trans-mission, bogies and wheel sets will be stocked as part of the tools andplant in the workshops and depots.

11. Bridae Workshop

The present workshop manufacturing steel bridges at Bandung iscapable of producing 1,000 tons of steel bridges per annum. The replacementprogram of overaged steel bridges and miscellaneous fabricated steelstructures required by the railways, requires expanding the capacity of theexisting shop to 2,000 tons/annum. The Plan provides for the essentialexpansion of the fabricating shop.

12. Re-stocking of Inventories of Spare Parts for Locomotives, Freight andPassenger Cars and Raw Materials (3.8% of Total Expenditure)

This item of the Plan covers the cost of normal stocks of spareparts for locomotives, freight and passenger cars and raw material like steelsections, spring steels, ferrous and non-ferrous metals, parts of trainlighting equipment, track material, and signalling equipment. Over theyears, PJKA's stock of such items has been badly depleted. Restocking ofthe inventories is essential for ensuring reasonable standards of maintenance,efficient functioning of the repair facilities and for better utilizationof existing assets.

13. Technical Training and Technical Assistance (5.2% of the Total Expenditure)(See Annex 2)

The technical training facilities on the PJKA at Bandung andJogjakarta are inadequate and need not only expansion, but upgrading of thestandards. With the setting up of training facilities for mechanical staffnear the major workshops at Jogjakarta, Mangarrai (Jakarta) and Surabaya,and for Sumatra at Palembang, the needs of workshops and depots will bemet. A staff college for management training for the higher cadres ofPJKA's staff and the provision of a specially equipped and manned train to

ANNEX 5Pag 6

travel around the system to impart training on the job to peranent waystaff are included in the Plan. While the abowre will form part of thepermanent training schemes built into the organtization of PJKA to ensureadequate training facilities not only to fresh recruits at the varioss levelsand different categories, but for refresher courses, there Is urgent needfor technical assistance from groups of expatriates from large railays,working in the field alongside their Indonesian counterparts for liditedperiods ranging from two to three years. Because of the heavy leeway tobe made good in effecting improvements in planning and production controlin workshops, in introducing methods of systematic track maintenance, ineffecting improvements in train and wagon fovenent, in proper stocking ofstores and inventory control, in the compilation of statistics and costlngand accounting methods, the quickest way to achieve the desired resultswould be to assist the PJKA staff on the job in the day to day functioningin these fields. This will ensure the most effective and expeditious meansof realizing the benefits expected from the investments proposed during thePlan. Besides such assistance, there is need for the employment of procurementconsultants or agents who will assist PJKA in the expeditio. procurement ofgoods and equipment required for the Project. Further, some "overseas" train-ing for selected staff up to 800 man-months giving emphasis to those techniquesand practices appropriate to PJKA's system and technical requirements isincluded in the Plan. A high level railway specialist at PJKA headquartersworking directly under the Chief Director, will coordinate the technicalassistance efforts.

Under technical training PJKA have proposed the setting up of alaboratory for soil testing and soil mechanics. Adequate facilities existat the laboratories in Bina Marga Workshops (road wing) built and equippedby USAID for soil testing and research. PJKA could make use of theselaboratories.

ANNEX 5Page 7

INDONESIA


Locomotive Requirements

A. Java (see also Table 3)

1973 12976 197-9(i) Passenger Trains

Pass-km (million) 2,050 2,44 3,125Passengers per train:

Steam 161Diesel 16i 170 209Railcars 100 100Electric 161 180 180

Train-km (million):Steam o056 - -Diesel l1.94 12.92 u3.75Railcars - 2.15 2.15Electric 0.20 0.20 0.20

Total 12.70 15.27 16.10

Train-km per diesel locoin traffic: 173,000 150,000 150,000

Diesel locomotives in traffic 69 87 92

(ii) Mixed Trains

Pass-km (million) 350 350 210Net ton-km (million) 300 300 180Average train-load:

Passengers 70 70 70Tons 60 60 60

Train-km (million)Steam 2.47 2.39Diesel 2.53 2.61 3.00

5.00 5.00 3-00


Diesel locos in traffic 23 24 30

AMUE 5FPage 8

1973 1976

(iii) Freight Trains

Net ton-km (million) 610 680 953Average train-load (tons)

Steam 97 - -Diesel 120 131 173

Train-km (million)Steam 2.09 - -Diesel 3.32 5.20 5.50

Total 5.41 5.20 5.50


Diesel looos in traffic 23 44 46

(iv) Total Diesel Locomotives in Main Line Traffic

Passenger 69 87 92Mixed 23 24 30Freight 23 44 4 6Departmental 10 15 20

Total, Java 125 170 188

(v) Percentage under, or awaiting,repair 30.2% 18.7% 15%

(vi) Total Diesel Locomotives in Stock in Java for in i ic

179 209 221

B. Sumatra (see also Table 5) 32 42 50

C. TOTAL, PJKA 211 251 271_ _ _

^ANNEX 5Page 9

INDCNESIA

APPRAISAL OF A RAIlWAY PROJECT


Requirements of Freight Cars,during Plan Period

(in terms of 2-axle cars)

1978-79

Net ton km to be moved I,,481 million

Average car-load, loaded cars only 10.5

loaded car Im per annum , 81 141.05 million

Car -k per car day in traffic 56 km

Number of cars loaded per annum v 2 518 750

NTmber of cars loaded per day 25187 = 6,9

% of loaded to total haulage 62.5%

Number of cars required for traffic 6 = ll,040

Allowance for peak traffic 12.5% 1Allowance ~~~~~~~~~~~~12,h20

Allowance for repairs 5% 6211/ 13j, 072

For ballast train workin g2 2l0 g

Cars available after scrappingabout 11,978 cars 12,682

Additional cars requiredin terms of 2-axle cars 599

Say 600 cars (2 axle)or 300 bogie cars.2'

1/ Department traffic to be carried in old freight cars awaiting scrappingas at present.

2/ 120 bogie hopper cars./ Proposed for procurement during the Project period: 200 bogie cars of

which 60 will be hopper cars.

INDONESIA

APPRAISAL OP A RAIILMY PROJECT

Calc.l.tion of Passenger Car Reg.iresents

Estimte of No. ofNo. of Estimated No. of isproved No. of vehiclel

Type No. of cars Avatlability Serviceable Pass -km per pass- km per Estimated servicsable availability re,uired proposed to No. of lb. ofof on books on of cars cars for Pass -bk serviceable serviceabi pass-ks caTs required of care cars in flet be scrapped car cars to b Km acqui-Cars Juno 30. 1973 for 1972/73 1972/73 for 1972-73 car for 1972-73 car for 1978-79 for 1978-79 for 1978-79 for 1978-79 for 1978-79 us to 1978-79 reuired rebabilitated sitioms

(8) (B) (CB) (-) (ill. ) (E-DOC) (,ill.) (F) (ill,) (G) (sill.) (H -GE) (I) (J-Ed1) (K) CL-i-K) (N)

Passenger Cars 2,497 73% 1,823 3.35 1.84 2.23'- 3.12 1,667 90. 1,852 1,046V/ 1,455 296% 105

1/ Better stilisation of passenger cars resulting from gre-ter number of air brake stock, reduction of ai.ed trains and rationalization of pasenger services.2/ 1,000 minly so.den body old cars and 46 soborbac stock.3/ 290 cars selected ont of 361 no- out of comission and 6 diesel ruil'c-rs.4/ 61 passenger cars and 22 rail car sets of 2 cars each.

In view of recent Govermsent decision to one PJXA for movement of paasengers under the Transoigration progrm., 61 passenger cars will be procured earlier, i. e., before 1976/77.

Source; Indonesian State Railways and Bnnk edssioc staff.April 1974

ANNEX 5Page 11

INDONESIA

APPRAISAL OF A RAILV-AY PROJECT

Schedule of lvithdrawal of Steam Locomotives from Service

uirber of Main Line Minimum Number of Steam Main LineYear Steam Locomotives Locomotives (excluding those

to be Retained in already awaiting scrapping) to beService (in stocl) 'Withdrawn from Service

Java Sumatra Java Sumatra TOTAL

1'973 260 200

1974/75 210 160 50 40 94

1975/76 150 120 60 40 100

1976/77 119 90 31 30 6b.

Total to beWithdrawn 141 110 141 110 251 /

fron Service

1Jce-nmber 1973

ANNEX 6

INDONESIA



Items to be Financed by the Loan

US$Millions

1. Track material for rehabilitation of tracks 4.84other than North Line

2. Track maintenance tools and plant 1.26

3. Equipment and material for rehabilitation and 0.22improvement of signalling

4. Equipment and material for improvement of 1.20telecommunications

5. 24 new diesel locomotives 11.00

6. 61 .aew passenger cars 6.00

7. 200 new freight cars (60 hoppers and 140 bogies) 3.60

8. 670 couplers for freight cars 0.90

9. Machine tools and handling equipment for 2.10rehabilitation and improvement of workshops anddepots

10. Spare parts for locomotives, freight and passenger 3.98cars and raw material

Subtotal 35.10

Price contingencies 7.50

11. Technical and procurement assistance and training 5.60

TOTAL 48.00

ANNEX 7

INDONESIA


Estimated Schedule of Disbursements

Cumulative DisbursementsAssociation Fiscal Year at End of Quarter

and Quarter (US$ '000)

F757

September 30, 1974 -December 31, 1974 20March 31, 1975 900June 30, 1975 1,800

FY76

September 30, 1975 3, 500December 31, 1975 4,100March 31, 1976 5,300June 30, 1976 6,800

FY77

September 30, 1976 11,000December 31, 1976 19,000March 31, 1977 28,400June 30, 1977 36,000

FY78

September 30, 1977 42,000Deceiber 31, 1977 47,600March 31, 1978 48,000

Principal Assusption:

Effective date for the loans Notlater than September 30, 1974.

INDOINESIA

APFRA.IIS,L OF A RAILWAY PROJECT


Staff Statistics and Projections

1972 1973 197h/75 1975/76 1976/77 1977/Th 1978/79 1979/801/

1. Number of Staff 63,644 61,500 59,500 56,900 54,500 52,100 49,900 48,000

2, Average Staff Ekolumnents p.a.Salary + Kind (Rp 000) 87.0 121.5 155.3 165.3 175.3 185.3 190.3 195.3

3, Staff Costs (Rp million) 5,537 7,472 8,650 9,405 9,354 9,654 9,496 9,374

4. % Staff Costs to Total OperatingExpenditure, IncludingDepreciation 32 39 40 41 40 40 39 38

5. Staff Productivity: 2/a - in traffic units 3/ 68,970 61,370 67,290 77,570 83,650 93,150 101,860 108,440b - in men per route km 9.4 9.0 8.8 8.4 8.0 7.7. 7.3 7.1

1/ Figures used in this table refer only to active staff; staff on severance pay not included(see para 3.08 and also Table 10, page 3, of this report).

2/ 1 traffic unit = 1 ton-km or 1 pass-kIn .

3/ Assumes no change in present route-km of PJKUA 6793 km.

Source: PJKA and Bank mission staff.December 1973

INDONESIA


Inventory Of Motive Power and Rolling Stock

Electric Diesel PassengerSteam Locomotives Diesel Locomotives Main Line Railcars Cars Freight Cars

Main Line Branch Line Shunting Main Line Branch Line Shunting Locomotives Main Line Bogie 4-Wheeler Bogie 4-WheelerAs of June 30, 1973

3/Total in Fleet (on book) 448 201 207 145 29 137 11 10- 2,184 313 2,381 19,898

1'Serviceable- Sub-total 276 70 175 109 13 93 4 4 647 12 1,389 8,694

Percentage q61.2 34.8 84.5 75 45 68 36.3 40 305/ 4 58 44

Under Repair 45 9 3 - - - - _) 158 - 128 632Awaiting Repair 55 28 6 1 1 3 - 1) - - -Awaiting Repair at Shops 63 30 2 35 15 41 7 5 212 - 61 200Awaiting Scrapping 9 64 21 - - - - - 1,167 301 803 1,372Sub-total 172 131 32 36 16 44 7 6 1,537 301 992 11,204Percentage 38.8 65.2 15.5 25 55 32 63.7 60 73 96 42 56

Good 248-2/ 121 - 28 - - 3 - 1,283 2,912Condition Fair 38 24 29 109 _ 10 588 - - 4,003

Poor 570 - - - 11 - 1,533 313 1,008 12,883

2/Less than 20 years 24 -Between 21 to 25 years 100

Steam Locos Between 26 to 30 years 2Over 31 years 730

2/Less than 5 years 42Between 6 to 10 years 64

Diesel Locos Between 11 to 15 years 149Between 16 to 20 years 56Over 21 years

c Electric Locos & Less than 5 years. Diesel Railcar Between 6 to 10 years 10

over 11 years 11

Less than 10 years 578 12 1,283 2,912Between 11 to 20 years 439 - - 4,003

Passenger and Between 21 to 30 years 5 - 6 -

Freight Cars Between 31 to 40 years 26 - - -

Over 41 years 1,136 301 1,092 12,933

10 to 15 Tons 126 19,89816 to 20 Tons 226 -

Carrying Capacity 21 to 25 Tons 544 -

of Freight Cars 26 to 30 Tons 1,484 -

30 Tons 1 -

1/ Total in fleet less under or awaiting repairs on the average, and due for scrapping.2/ Total of main line, branch line and shunting.3/ 10 Diesel power cars.4/ Electric main line locomotives are over 21 years old.5/ 73% if cars awaiting scrapping but still in partial service are still considered as in service.

Source: Indonesian State Railways

November 1, 1973

INDONESIA


Freight Traffic - Revenue Earning - All PJIA Lines, Actual 1962, 1966-1972

1962 1966 1967 1968 1969 1970 1971 1972

T T-Rm A.D. T T-Km A.D. T T-Rn AlD. T T-Fn A.D. T T-Kin A.D. T T-Kn A.D. T T-Rm A.D. T T-Km A.D.

Sugar 321.5 50.7 158 89.9 86.2 291 68.3 24.5 359 ' 83.5 35.4 424 155.9 60.0 385 138.7 51.9 374 98.1 36.5 371 121.8 53.3 439

Rice 315.0 57.9 184 196.0 45.02 230 147.7 44.53 301 164.5 29.11 177 202 59.7 296 183,1 46.03 251 219.2 85.15 388 111.3 39.07 351

Firetsud 142.8 15 105 105.7 11.3 104 53.8 4.8 85 69.8 5.7 78 102.5 9.5 90 98.2 8.6 85 107.0 10.2 92 - - -

Melassee 140.9 17.9 128 158.6 24.3 153 162.6 25.5 157 137.8 22.0 145 138.4 19.0 138 154.4 22.5 146 167.4 28.0 167 163.1 24.4 150

Kerosene 167.9 33.11 197 150.4 28.47 190 216,2 40.3 186 305.5 56.8 186 386.4 71.5 185 376.6 68,8 183 399.5 72.1 181 552.3 96.9 176

Gas.line 218.6 39.24 180 213.5 41.47 194 202.2 35.99 178 219.3 38.98 178 245.8 42.87 174 264.4 45.46 172 274 46.44 169 344.8 54.9 159

Cenent 256.0 85.62 334 164.6 81.41 494 99.7 56.08 562 147.1 71.3 485 179.5 61.1 340 205.0 73.7 360 190.5 62.9 336 247.5 73.5 297

St.ne 120.0 28.7 2 64.4 8.0 - 43.0 6.9 160 54.3 6.4 118 183.7 20.8 113 233.4 28.0 120 295.7 28.3 130 371.0 44.1 119

Wend 163.4 51.61 316 128.5 46.63 363 91.5 35.04 383 102.3 38.39 375 116.8 45.8 392 98.2 37.6 377 152.7 50,8 333 190.5 49.67 261

FPel 176.6 35.2 199 178.9 33.92 190 170.1 33.1 195 173.8 35.4 204 178.5 37.6 211 189.4 27.6 146 220.9 46.1 209 140 23.8 170

Salt 129.3 32.4 251 39 25.2 646 32.8 17.56 500 27.8 13.1 471 40 19.74 492 43,4 21.53 496 45.6 21.66 475 42 17.88 426

Fertilieer 238.2 53.86 226 130 30.33 233 71,48 18.805 263 184 36.4 198 204.6 35.8 175 97.5 20.9 214 99.1 22.2 224 98.1 20.9 213

Send 70.7 4.6 65 88.4 2.7 31 86.4 2 44 132.8 4 31 181.2 6.5 36 202,4 6.6 32 269.8 8.3 31 207.7 6.0 29

Slyu Been, 101.4 40.86 403 83.7 47.39 566 48.8 31.4 643 48.4 27.8 574 54.1 33.8 625 70 43.8 626 67.7 37.7 557 102.1 62.6 613

Robber 108.9 21.93 201 83.7 19.74 236 59.9 16.582 277 130.6 29.18 223 130.9 33.83 258 110.6 24.37 220 86.1 18.93 220 46.4 10.91 235

Coffee 12.7 3 236 16.1 3.94 245 27.6 76.3 276 18.8 4.8 255 31.4 7.4 236 20.4 3.6 177 8.2 1.4 169 12.4 2.3 183

Cepro 12.5 0.87 70 9.6 0.58 60 1.7 0.22 129 0.7 0.03 49 0.7 0.03 47 1.2 0.05 45 1.1 0.05 46 2.4 0.11 46

Diesel 4.7 0.32 68 8.7 1.75 201 7.2 1.588 221 0.7 0.006 9 0.4 0.003 10 0.4 0.002 7 0.3 0.002 7 0.6 0.05 8

CRal 57.1 6.4 112 60.1 6.8 113 47.1 5.6 119 53 6.6 125 65.8 6.4 97 69.4 8.2 118 65,1 8.6 132 64.9 8. 125

Brick 10.9 0.7 68 9.7 0.5 52 5.6 0.28 50 5.9 0.28 48 6.9 0.34 49 7.4 0.34 46 9.5 0,45 48 10.0 0.48 48

Miscell-ne-ue 1,648.3 449.43 273 970.9 296.32 305 471.52 167.105 354 1,245.5 275.454 221 1,303.6 271.477 208 1,394.1 316.188 227 1,424.8 363.24 255 1,733.1 449.52 259

TOTA70 4,417.4 1,029.35 233 2,950.4 791.51 268 2,115.2 575.51 272 3,306.1 737.13 223 3,909.2 843.19 215 3,958.2 855.17 216 4,202.3 949.02 226 4,562.0 1,038.39 227

Notes: T = Tens tn thousands.

T-.E = Ton-kil-eters in illi-e. A.D. = Average dist.... in kil-mt-,s

Source: PJIAFebruary 1974

INDONSSL4 TABLE 4Page 1 of 3 pages

APPRAISAL oY A RAILVAY YIOJlCT


.lams Linsa

Stat"istic

1971 1972 1973 1974 1976 1979

F:reaI tl le' a f flc - Eeene E:arshi t

roes 11,005 2,836 3,131 3,446 3,790 4,050 4,600Toe - km 1r,111os7 765 831 910 990 1,049 1,133

No (eillao) 44.5 36.8 26.0 27.6 31.0 37.0Postengr:t - kS (o1111"o7 3,317 3,066 2,400 2,480 2,791 3,335

krae - km (million)

Pi,-,tNsr 12.2 12.3 12.2 12.4 13.5 15.4F-r 1gl.L 4.8 4.4 4.9 5.0 4.7 5.0M711l at'5.0 5.7 5.0 5.0 5.0 3.0SOrrok c2.Z 1.6 1.8 1.8 1.7 1.5

T'otlt, 124.2 24.0 23.9 24.6 24.9 24.9

v0ji, 11 1 - k'.s 6.ill I-ln)

F dlgh l- 82.3 83.1 87.5 93.6 97.1 107.9

EmpLy 54.3 53.6 55.9 59.8 60.8 64.7Ert-girt toro - S-rol-c trafflc 24.3 16.8 18.0 18.0 17.0 16.0

'I'orL:sI 165.,9 133.5 161.4 171.4 174.9 188.6

6l) AIr-Ibrakti St-ck:Pe.-g-er, Lit i-oes, s dr-oodltloid 3.3 3.8 3.8 4.0 4.0

7ed clo .a -- dlrcoadStlee-±d 2.0 2.7 2.7 2.7 3.02o'd clas ned 3rd elate, ordi-ery 30.8 32.7 32.7 33.0 47.0 )

R<eataslroot .sed kiocheh cees, oir-coodttioeed 6.8 0.8 0.8 0.8 1.0 )92.0Re starret and ktoes care, ordinary 6.3 6.9 6.9 6.9 7.0

Mall oooa o~~ ~ ~~~~ ~~~~ ~~~~~.30.3 0.3 0,s 0.5

-aaoooaed 1-roko oae 6.7 7.4 7.4 7.4 7.5(b) N9. olr-Sbrakd sLock 37.0 32.5 30.0 30.0 21.2 6.4

ate l 87.4 87.3 84.8 85.3 91.2 98.4

CraoS lcsi 110k 100 - km (rollioe)

P"'soeelg- 2,622 2,619 2,580 2,730 2,940 3,610r-lgiht 1.687 1.764 1.910 2,109 2_250 2350

Total 4£309 4,383 4.490 4839 5,190 5.960

Crass too - km toolaldie Locomotives (ailleo)

Pa-s-eg-c 3,784 3,827 3,730 3,880 4,100 5,000Fr-ight 2 316 2.402 2.646 2,894 3,035 3,100

Total 6.100 6.229 6,376 6,774 7,135

Locomotive - kb (million)

Paeangerl - steam 2.47 1.96 .56 - - -diesel 10.23 10.79 11.94 12.70 12.92 13.75diesel rail-are - - - 970 0.70electric 0.19 0.31 0.20 0.20 0.20 0.20elsotclo ralletric- - - - 1.45 1.45

Total 12.89 13.06 12.70 12.90 15.27 16.101/

Freight - stea. 2.12 1.93 2.09 .85 - -diesel 3.32 3.15 3.32 4.75 5.20 5.50

Total 5.44 5.08 5.41 5.60 5.20 5.50

NiOed -steam 2.82 3.05 2.47 2.47 2.39 -diesel 2.17 2.61 2.53 2.53 2.61 3.00

Total 4.99 5.66 5.00 5.00 5.00 3.00

Sh-nti.g steam 3.68 3.40 3.68 3.68 3.68d.esel 2.37 1.89 2.37 2.37 2.37 6.00

Total 6.05 5.29 6.05 6.05 6.05 6.00

Departmental -steam .98 .67 .98 .98 .67 -di-es 1.23 .88 .81 .88 .99 1.50electric .03 .1 .02 02 - .02

Total 2.24 1.56 1.88 1.88 1.66 1.52

Total, all services - steam 12.07 11.01 9.78 7.98 6.74 -diesel 19.32 19.32 21.04 23.23 24.09 29.75diesel -islears - - - - .70 .70electric .22 .32 .22 .22 .20 .22electic r-ilcals - - - - 1.45 1.45

Total 31.61 30.65 31.04 31.43 33.18 32.12

1/ -clading light rcenieg and a.ssiting teqLited and met reqvired.

Seorce: Isdonesian State Rallays asd Bank missioe staf4.

December 1973

TABLE 4Page 2 of 3 pages

INDONESIA



Java Lines

Statistics

1971 1972 1973 1974 1976 1979

Locomotives in Stock

Steam - shunting 134 134 134 134 134 -Steam - main line 364 364 260 170 119 -

Diesel - shunting S3 93 93 93 93 93Diesel - shunting, used for main line work 33 33 33 33 33 33Diesel - main line 131 131 146 152 176 189Electric 9 9 9 9 9 9Railcars 10 10 10 10 54 54

2/Main-line Diesel Locomotives in Traffic-

Passenger 62 6S 74 87 92Mixed 23 23 24 24 30Freight 23 23 35 44 46Departmental 10 10 10 15 2C

Total 118 125 143 170 188

Locomotive - km per annum per main line diesel locomotive in traffic 2/

Passenger 173,000 173,000 173,000 150,000 150,000Mixed 113,500 110,000 110,000 110,000 100,000Freight 137,000 137,000 137,000 120,000 120,000Departmental 88,000 88,000 88,000 66,000 75,000Average - all services 147,'00 149,400 145,900 134,100 126,300

Freight-car and Train Performance

No. of serviceable freight cars in use 7,500 7,500 7,500 7,500 7,500 8,450Serviceable freight car days in use (000) 2,740 2,7;00 2,740 2,740 2,740 3,100Average car-load, loaded cars only (tons) 9.3 10.0 10.4 10.6 10.6 10.5No. of cars loaded (000) 305 313 332 358 380 438

Car - km per car-day in traffic 50.1 50.1 52.3 56.0 57.6 56.0Car - turnaround (days) 9.0 8.8 8.3 7.6 7.2 7.3Car - km between turnaround 450 439 432 428 415 410

% loaded to total car - km 60.2 60.8 61.0 61.0 61.5 62.5Freight train-km, freight plus proportion of mixed (million) 8.1 8.2 8.2 8.3 8.0 7.0

Average no. of cars per train:Loaded 1C.2 10.2 10.7 11.2 12.1 15.4Empty 6.7 6.6 6.8 7.2 7.6 9.2

Total 16.9 16.8 17.5 18.4 19.7 24.6

Average net train-load (tons) 94.5 101.3 111.0 118.8 131.1 161.9Average gross train-load (tons)(excluding locomotive) 207.8 215.1 232.9 253.2 281.3 335.7

2/ Including diesel shunters used for main line work.

TABLE 4

?Page'3 of 3 pages

INDONESIA



Java Lines

Statistics

1971 1972 1973 1974 1976 1979.

Passenger car and train performance:

Number of serviceabJ$ cars in stock:air-braked capasy 615 615 615 615 7449 983

unbraked cars-/ 1,577 1,577 1,348 1,040 900 300

Number of cars in traffic:air-braked cas-6 560 560 560 570 709 933

unbraked carsD- 1,265 1,265 1,112 904 810 250

Car-km per car day in traffic:air-braked cars 246 266 269 286 270 270

unbraked cars e0 70 73 77 72 70

Train-km; pasaenger and passenger proportion of mixed (million) 13.9 14.2 13.9 14.7 15.2 16.4

Average no. of cars per train 6.3 6.1 6.1 5.8 6.0 6.o

Average no. of passengers per train 239 216 167 170 165 195

Passenger traffic: 7

Number of passengers - 1st class (in thousands) 456 805 ) 300 340 400

2nd class 8,644 8,431 )26,000 800 goo 1,0503rd class 35,536 27,555 ) 26,500 29.760 35,600

Passenger-ion (million)-lst class 151 243 ) 168 190 2242nd class 2,205 2,142 ) 2,400 200 225 263

3rd class 961 681 ) 2,112 2,376 2,848

Average length of journey (km) - 1st class 332 302 ) 560 560 5602nd class 255 254 ) 92 250 250 250

3rd class 27 25 ) 80 80 80

Revenue per passenger-km (Rp ) - 1st class 3.5 4.7) 6.5 6.5 8.02nd class 1.5 1.6) 2.7 5.3 5.3 6.53rd class 1.0 1.0) 2.5 2.5 3.3

Total passenger revenue (Rp million) - 1st class 589 1,1146 ) 1,092 1,235 1,7922nd class 3,300 3,423 ) 6,480 1,060 1,153 1,710

3rd class 960 681 ) 5,280 5,°40 9,3,8

Total 4,8249 50 6,1480 7,432 8,368 12,900

Freight Revenue:

Average length of haul (km) 270 265 264 261 256 256

Average revenue per ton-km (Rp) 4.72 5.11 5.69 6.12 6.70 8.50

Total freight revenue (Rp million) 3,612 4,244 5,178 6,059 7,028 9,630

3! Program of rehabilitation of 290 cars at rate of 60 per annum, starting 1975, purchase of 44 railcars, 1974/75,rehabilitation of 6 railcars, 1975/76 and purchase of 61 new coaches 1977/79.

4/ Improvement of bad-repair ratio from 25% to 1051 and scrapping of about 1,000 cars.

§/ Improvement of bad-repair ratio from 9% to 5%.&/ Estimated number required for local and branch-line services in 1979.

_/ Revision of tariff structure in May 1973 radically changed classification of passenger traffic.

I

INDONESIA TABLE 5

APPRAISAL OP A RAILWAY PROJECT


Sumatra Lines

Statistics

1971 1972 1973 1976 19?9

Fre. 'ht- raffic (revenue-earning)T-onls (000) South 5156546 750 916

North 580 653 679 786 910West 58o 262 250 300 370Total 1,366 1 431 1,L75 1,836 2,19G6

Ton-km (mil-lion)South S0 101 96 157 200North sO 90 90 107 123'Test 14 16 16 18 20Total 11814 207 202 282 3488

Average revenue per t-on-kim (Rp) 5.6( 6.O0 6.73 7.140 8.50

Total freight revenue (Rp lr-llion) 1,041 i,251 1,359 2,087 2,958

Lasene.e.-er Trafficl'csserigos, ro. (m1illion)

South o.5;4 1.03 1.02 1.18 1.3North 2.5j 1.40 0.86 0.914 1 .C5West 0.80 0.89 0.92 0.95 1.00Total 14.33 3.32 2.80 3.07 3b.42

Passengor-Imi (nillion)South 157 176 178 2214 282'4orth 107 89 62 72 83

West 20 21 22 22 , isTotal 281; 286 262 318 38-

Average revenue per pass-lm (Rp) 1.7)4 1.97 2.20 2.60 3.00Total passenger revSrue (P.p million) 495 562 576 827 1,167

Train-krn (million)

Pasio.nger 1. 1.9 1.8 2.0 2.1YIxed 2.1 1.9 1.8 1.8 t ESFroi-ilt 1.0 1.3 1.2 i.5 2.0

Servicc 0.3 0.3 0.3 0.3 C.3Total 4.9 5.14 5.1 5.6 6.2

Ave;a gp train-] oad.Passen, e-r anca Tassenger xrooortioil

of ir.-ed - no. of passengers 129 114 110 120 13U

£ reight- a-nd freight pronortior ofmixed net tons 7-7 80 85 100 110)

Locomotive-'si (raillion)STxr.un L.h 14.3 3.8 2.6 2.0

T-.lesel 1.5 2.0 2.3 14. 502Total 5.9 6.3 6.1 6.6 7.2

',,o, o' noin-l, e 1ocornotiver n traff-i;. c. :-l n 100 100 86 19 46Di esel 16 16 18 32 142

lo. of may;-l-ir :or c't;ve3 in stecqS LC (.1,, ( .r 1; s r I 7*t >! 1, ,/ j i ) 21414 2L 4 200 90 6cDiesel (r iir ralio 15; in 192 ) 2) 28 32 82 50

Source: PJKA and Bank mission staff.

December 1973

INDONESIA

APPRAISAL OF A RAILWAY PROJECTTraffic Forecast (Revenue Earning - 1972-79) !I

1972 1973 1974 1975 1976 1977 1978 1979(Actual) (Provisional)

JAVA AND MADURA

Tons Loaded (000) 3,131 3,446 3,790 4,080 4,050 4,280 4,432 4,600Ton-km Hauled (million) 831 910 990 1,059 1,049 1,083 1,108 1,133Passengers Carried (million) 36.8 26 27.6 29.3 31 32.9 34.8 37Pass-Km (million) 3,066 2,400 2,480 2,791 2,900 3,125 3,285 3,335

SOUTH SUMATRA

Tons Loaded (000) 516 546 645 720 750 842 878 916Ton-Km Hauled (million) 101 96 116 140 157 177 187 200Passengers (million) 1.03 1.02 1.07 1.13 1.18 1.24 1.30 1.37Pass-Km (million) 176 178 192 208 224 242 261 282

NORTH SUMATRA

Tons Loaded (000) 653 679 750 800 786 825 866 910Ton-Km Hauled (million) 90 90 100 108 107 110 120 128Passengers (million 1.40 0.86 0.88 0.91 0.94 0.97 1.03 1.05Pass-Km (million) 89 62 65 69 72 76 79 83

WEST SUMATRA

Tons Loaded (000) 262 250 267 284 300 321 345 370Ton-Km Hauled (million) 16 16 18 18 18 18 19 20Passengers (million) 0.89 0.92 0.93 0.94 0.95 0.96 0.98 100Pass-Km (million) 21 22 22 22 22 23 23 24

TOTAL FOR PJKA

Tons Loaded (000) 4,562 4,921 5,452 5,884 5,886 6,268 6,521 6,796Ton-Km Hauled (million) 1,038 1,112 1,224 1,325 1,331 1,388 1,434 1,481 mPassengers Carried (million) 40.12 28.80 30.48 32.28 34.07 36.07 38.11 40.42Pass-Km (million) 3,352 2,662 2,760 3,089 3,218 3,465 3,649 3,724

1/ Excludes Aceh line.


INDONESIA


Passenger Traffic - All PJKA Lines -

ACTUAL 1962-1973FORECAST 1974-1979

Year Number of Passengers Passenger-Kilometers Average Distance(million) (million) (km)

ACTUAL1962 172.44 7,409 431963 149.78 6,789 451964 140.93 6,551 471965 140.94 7,464 531966 99.36 6,027 611967 78.97 5,001 631968 70.43 4,053 581969 54.17 3,370 621970 52.42 3,549 681971 48.96 3,601 681972 40.12 3,352 841973 28.80 2,662 92

FORECAST

1974 30.48 2,760 921975 32.28 3,089 961976 34.07 3,218 941977 36.07 3,465 961978 38.11 3,649 961979 40.42 3,724 92

1/ Excludes Aceh line.


OSONEjNSIA

APPRAI SAL OF A-~ PATWAY' PROJE~CT

INDON-ESIAN STATE RAILWAYS

Sno-t-an Plan - 1974/75 through 1978/79

Figros On millions (US$E.SS - Rp 415)

TO0T AL P LAN1974 -75 RUPIAH9 1975 - 76 RUPIAHI 1_.976 - 197 REpo.AHo _ ~ - 78 RUIA 1978 - 79 RUPIAII RUIH:197 - THROUGH 1978 -79

Loca Foregn Total Lcl oegn Ttl Local Foreign Total Lo-I Fore.Ig Ten oa orin Ttl Loa oeg Ttl Lcl oeg oa

1. Rehehilitaciac cf North Line 1710.63 2446.A3 4157.06 A22.43 273.90 696.33 695.864 1442.98 2138.64 100.55 - 100.35 - - - 2929.47 4163.31 7097.78 7.06 10.03 17.09

2. Rehablllrtltin of Trak Ot~ 1/4089.62 209.16 4298.78 4646.13 1767.24 6433.37 4602.60 817.63 5420.23 4106.40 1235.79 9042.19 4456.19 341.96 4798.15 219809.94 4411.78 26392.72 02.97 10.63 63.60Then North Lion

3. Tools and Plant Iar 67.92 112.08 100.40 148.24 295.48 443.72 59.22 112.88 172.10 213.92 527.00 743.80 59.22 112.00 172.10 550.12 1182.00 1T12.12 1.33 2.90 4.13Trak Minet-anc

4. Rehahilitnanlon and nromoc 32.37 - 32.37 859.13 144.17 1003.30 036.09 142.18 979.07 836.89 147.33 904.22 036.89 147.33 984.22 3602. 17 581.01 3983.10 0.20 1.40 9.00

S. 1,prao,na-t tn Telecnsn-lg- - - 220.76 1206.50 1502.29 112.42 - 112.42 109.66 436.50 646.16 70.34 - 70.34 593.20 1743.00 2336.20 1.43 4.20 3.63

6. L-conm -Elve2ŽNew - 60 (40) 66.04 3666.73 3734.81 101.26 2131.23 3232.51 30.63 0067.50 1908.13 20.63 1867.50 1910.13 270.58 12333.00 12902.38 0.63 20.20 30.85R.hobilitatioc - 59 (59) 212.70 516.75 731.43 204.40 784.33 908.73 202.00 601.75 8037.13 - - - - 622.30 1904.80 2522.35 1.20 4.59 6.09

7. Rils Ear2 212.70 018.75 731.45 272.46 4431.10 4723.56 306.66 2733.00 6039.66 50.63 1070 IOTT -50.-6-3 1107750 719177 89318B 14437.85 415330.93 2.15 34.79 36.94New Eleonrin- II (10) 35.28 946.20 961.49 - - - - - - - - 3.8 962 8.8 00 .823

N i 1- 12 (0)- - - - 39.43 1061.57 1101.00 . . 39.43 1061.57 1101.00 0.10 2.53 2.63Re hbllItanIn of old 56.94 132.80 197 - - - ----. -564 1380189.74 0.14 0.32 0.46Diesel Iare - 4 (4) 92.22 10790 1112 94 015 100 0 - -.- - 131.65 2149.57 2272.22 0.33 5.10 9.48

2, - - -" 48.14 498.00 546.14 T112.05 2988.00 3100.05 48.14 1056.25 1106.39 48.14 1058.25 1106.39 256.47 502.50 5858.9 7 0.61 13.1-0 14.11

.en 380 - (200) lagine- 32.37 1494.00 1526.32 - - - - 16.60 747.00 763.60 48.97 2241.00 2289.97 0.01 2 5.40 5.52Air Brakes - 2443 (3582) 5 1.75 223.27 275.02 186.03 807.59 994.42 174.38 753.64 928.02 219.99 946.20 1165.19 225.76 976.08 0201.84 857.71 3706.78 4364.49 2.07 8.93 11.00Cnupl-r - 670 (670) . - - 2.91 41.30 44.41 23.24 332.00 355.24 - - - - - -2.5 3.0 3965 0.06 0.90 0.96

10, Wtk Sh.p ~1.5 2322 22.0 2211 233.9 5Dp0 9762 105.4 1203.26 218.99 946.20 -1165. 19 242.36 1723.08 1965.44 932.8 3 6321.28 7254.11 2j.2 5 15.23 17.48

Rnhahalitatigo & 16.85 148.82 165,67 207.54 730.73 938.27 165.34 800.87 966.21 19.42 426.29 445.00 - 311.25 311.25 409.45 2417.96 2627.11 0.59 5.82 6.81

11.ImetreOPera pemla far l-omti-e, 49.80 251.09 409.89 78.85 730.98 809.83 60.18 571.66 631.94 83.00 693.71 776.71 83.00 704.92 787.92 354.83 3052.36 3407.19 0.8) 7.36 8.21freight and passen gertr

12. Total of Etem 1 to 11. 8323.46 5089.40 11412.86 7175.81 12541.19 19667.00 7188.27 14756.39 21944.66 5949.60 2379.45 13329.05 5846,27 6267.17 12113.94 32453.91 46033.62 78467.53 78.12 110.81 189.08

13. Enatiogenriee±/ ~~~~~463.91 153.46 1017.37 .093 23.1 4483 15.0 2548 4068 1864.67 3247.48 5112.15 2360 3155.97 5206.57 7020.50 125.01570.50 17.16 30.00 47.16

14. Teihaital Asllan,25232 ~ 82 P3 1162.00 1548 2.8 697.20 7.8 334.50 95.5 189.00 715 7.5 5884 12023.6 0

j121

Pr...oreetl Assint .... Ii15. Gred Total 7039.89 6102.66 13147.35 8607.76 16642.20 25259.96 8969.33 10007.69 269)7.0 2 8148.77 11581.43 19730.20 80748.96 9900.39 17949.35 40824.53 6229.37 183063.80 98.39 149.96 248.35

NOTSTO: I/ aeclode Invetment on Nonrth Line far eafetynaar.- / Figore in hrokete refer to P-ojet period.

1- nclde. protieo for ato_h of osl'ocepen-t. lihe ccplatt en9o- -rd Ern Inec -a impr....d oo,tp.ttEcl,den an-tinga...ia. ..a technical aenlanang and

tr-ioi g.

So-go P1KA and Bank oloi..i eta 8fApritl 1924

INDCNESIA


INDONESIAN S1ATE RAILWAYS

,- ~~~~~~~~~~~~~~~~Pro ject Investment 1974/75 through 1976/77

Figores it nilliono (US$1.00 - Rp 415) Total Project 1974-75 through Total Project

1974-75 Rapiah 1975-76 Rupiah 1976-77 Rupioh 1976-77 Eoprodit-ro - Rupiah Ependiture - U0$

Local Foreign Total Local Foreigo Tatol Locol Forcigo Total Local Foreign Total Loral Foreign Total

1. Rehabilitation of North Line. 1710.63 2446.43 4157.06 422.43 273.90 696.33 695.86 1442.98 2138.84 2828.92 4163.31 6992.23 6.81 10.03 16.84

2. Rohabilitati-n of Track otherthan North Lime 1/ 4089.62 209.16 4298.78 4646.13 1787.24 6433.37 4602.60 817.63 5420.73 13338.35 2814.03 16152.38 32.14 6.79 38.92

3. Tools and Plant forTrack Muinteno-ce 67.52 112.88 180.40 148.24 295.48 443.72 59.22 112.88 172.10 274.98 521.24 796.22 0.66 1.26 1.92

4. Rehabilitation andInprovonoat to Signolling 32.37 - 32.37 859.13 144.17 1003.30 836.89 142.18 979.07 1728.39 286.35 2014.74 4.16 0.69 4.85

5. Inerov-ment to Tele-cotmunicatione - - - 220.78 1286.50 1507.28 112.42 - 112.42 333.20 1286.50 1619.70 0.80 3.10 3.90

6. LoconotivesNle - 40 - _ _ 68.06 3666.75 3734.81 101.26 5131.25 5232.51 169.32 8798.00 8967.32 0.41 21.20 21.61Rehahilitatio- - 59 212.70 518.73 731.45 204.40 784.35 988.73 205.40 601.75 807.15 622.50 1904.85 2527.35 1.50 4.59 6.09

212.70 319.75 731.45 272.46 4451.10 4723.56 306.66 5733.00 6039.66 701.82 10702.85 11494.67 1.91 25.79 27,70

7. Rail CarsNes Eloetric - 10 35.28 946.20 981.48 - - - - - - 35.28 946.20 981.48 0.09 2.28 2.37Row Diesel - 12 - - - - - - 39.43 1061.57 1101.00 39.43 1061.57 1101.00 0.10 2.56 2.66

Rehabilitatton of oldDi tars - 4 56.94 132.80 189.74 - - - - - - 56.94 132.80 189.74 0.14 0.32 0.46

92.22 1079.00 1071.22 - - - 39.43 1061.57 1101.00 131.65 2140.57 2272.22 0.33 5.16 5.49

8. Passenger CotsRehwahlitati.n - 120 - 69.14 498.00 546.14 49.14 499.00 546.14 96.28 996.00 1092.28 0.23 2640 2.63Nos Passenger Cars (61) ---- -- 63.91 2490.00 2553.91 63.91 2490.00 2553.91 0.15 6.90 6.13

9. Frieght Cars

New - 200 (Bogin) - - 32.37 1494.00 1526.37 - - 32.37 1494.00 1526.37 0.08 3.60 3.68Air Brakes - 3583 51.75 223.27 275.02 186.83 807.59 994.42 174.38 753.64 928.02 412.96 1784.50 2197.46 1.00 4.30 5.30Couplers - 670 - - - 2.91 41.50 44.41 23.24 332.00 355.24 26.15 373.50 389.65 0.06 0.90 0.96

51.75 223.27 275.02 222.11 2343.09 2565.20 197.62 1085.64 1283.26 471.48 3652.00 4123.48 1.14 8.80 9 94

10. rk Shos6 Dots 2/Rehabilitatiom & Inpro-e--nts- 16.85 148.82 165.67 207.54 731.73 938.27 165.34 800.87 966.21 389.73 1680.42 2070.15 0.94 4.05 4.99

11. In-entorieuSpare ports tat locomettiecsfreight and pas.c.ger cars 49.80 351.09 400.89 78.85 730.98 809 83 60.18 571.66 t31.84 188.83 1653.73 1842.56 0.46 3.98 4.44and raw natortal_______

12. Total of Itenc I to 11 6323.46 5089.40 11412.86 7125.81 12541.19 19667.00 7188.27 147T,6.39 21944.66 20637.54 32387.00 53024.54 49.73 78.04 177.77

13. Contiogeocie / 463.91 553.46 1017.37 1109.32 2939.01 4048.33 1552.00 2554.08 4106.08 3125.23 6046.55 9171.78 7.53 14.57 22.10

14. Techoicul Aosiat.nc &6T_choic-1 troinin8 / 252.32 464.80 717,12 382.63 1162.01 1544,63 229.08 697.20 926.28 864.03 2324.0 _380 2.08 j 7 68

15. Grand Trota 7039.69 6107.66 13147.35 8617.76 16642.20 25259.96 8969.35 18007.67 26977.02 24626.80 40757.55 65384.35 59.34 98.21 157.55 ,

NOTES: 1/ Occludes investment on North Line far s-foty ousoces.7/ Inclodes pro-iei.n for stork of main co-poacots like co-plete engine end truesodaslon for improved out-put cf shops and dnpets.

E- Idclados caotingencie- on technical assistance and training.

4/ Onelodes coatlagoocles. v

Seance, PIKA a-d mission staff.April 1974

INDONESIA



Income Account

1968-80

ApproximateActual, Calendar Year Calendar Year Proiected, Financial Year April 1 to March 31

1968 1969 1970 1971 1972 1973 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80(Rupiah Million)

Operating Revenue:

Passengers 3,584 4,565 4,829 5,344 5,812 7,056 8,072 9,073 9,527 11,196 12,944 14,507Luggage 97 94 93 92 80 67 73 83 90 96 103 110Parcels 99 185 -243 255 316 322 335 343 351 359 367 375Mail 12 34 30 33 40 43 48 55 60 67 68 70Freight 3,029 4,424 4,519 4,653 5,495 6,537 7,709 8,420 9,115 9,842 11,032 12,588Ferry Services 194 270 2&9 378 433 450 465 475 490 500 515 550Ancillary Services 46 126 159 113 103 119 125 130 137 144 152 160Miscellaneous 116 141 202 550 940 950 960 970 980 990 1.000 1.000

Total Operating Revenue 7,177 9.839 10,364 11,418 13,219 15,544 17,787 19,549 20,750 23.194 26.181 29.360

Operating Expenses:

Staff costs:Wages, salaries, allowances 1,223 2,106 2,279 3,219 3,437 5,012 6,251 7,112 7,358 7,554 7,485 7,440Payments in kind (rice, sugar) 2,308 2,127 2,382 2,040 2,100 2,460 2,399 2,293 2,196 2,100 2,011 1,934Severance pay - - - 499 571 888 1,306 1,375 1,335 1,313 1,234 1,232

Uniforms 180 233 286 275 311 280 142 145 150 150 155 155Fuel 1,306 2,434 2,233 2,332 2,315 2,500 2,951 3,168 3,233 3,178 2,896 2,788Other materials 763 1,015 1,143 1,463 1,715 2,500 3,085 3,094 3,224 3,519 3,750 3,900Accident repairs 129 150 125 124 79 140 150 150 150 155 155 155

Miscellaneous charges 1,200 1,750 1,790 1,852 2,559 3,000 3,356 3,732 3,812 3,419 3,502 3,612Total, cash outgoings 7,109 9,815 10,238 11,804 13,187 16,580 19,640 21,069 21,478 21,388 21,188 21,216

Depreciation 91 120 150 212 239 5,040 5.280 5,520 5,760 6,000 6,250 6,500

Total Operating Expenses 7,200 9,935 10,388 12,016 13,426 21,620 24,920 26,589 27,238 27,388 27,438 27,716

Net Operating Revenue (or Deficit) (23) (96) (24) (598) (207) (6,076) (7,133) (7,040) (6,488) (4,194) (1,257) 1,644

Estimated savings from closure ofuneconomic lines, and/or compensationby the State for continued operation

of such lines on social grounds:

Java feeder lines 300 300 300 300 300 0EWest Sumatra 280 320 350 380 425 x w3

Aceh 220 250 275 300 327 ,. w2

Total 800 870 925 980 1,052 0Adjusted Net Operating Revenue

(or Deficit) (23) (96) (24) (598) (207) (6,076) (7,133) (6,240) (5,618) (3.269) (277) 2.696 w

Operating Ratio - % 139 140 136 131 118 105 94 a

Source: PJKA and Bank mission staff.

March 1974

INDONESIA TABLE 10Page 2 of 3 pages



Notes on Projected Income Account

I. Operating Revenues

The basis for the calculations of revenue from passenger and freighttraffic are as follows:

(a) Passenger Traffic

Passenger-kim (Million) Revenue per passenger-km Total Passenger Revenue(Rp) (Rp Million)

Year Java Sumatra Total Java Sumatra Total Java Sumatra Total

1971 3,317 284 3,601 1.46 1.74 L)48 4,849 4c5 5,3441972 3,066 286 3,352 1.71 1.97 1.73 5,250 562 5,812.1973 2,)400 262 2,662 2.70 2.20 2.65 6,480 576 7,0561974/75 2,480 280 2,760 3.00 2.29 2.92 7,432 64o 8,0721075/76 2,791 298 3,089 3.00 2.35 2.94 8,373 700 9,0731576/77 2,900 318 3,218 3.00 2.60 2.96- 8,700 827 9,5271977/78 3,125 34o 3,465 3.30 2.60 3.23 10,312 884 11,1961578/79 3,285 364 3,649 3.63 2.80 3.55 11,925 1,019 12,9441979/80 3,335 389 3,724 4.00 3.00 3.90 13,340 1,167 14,507

(b) Freight Traffic

Net Ton-km (Million) Revenue per Net Ton-km Total Freight Ulevenue(Rp) (Rp Million)

Year Java Sumatra Total Java Sumatra Total Java Sumatra Total

1971 765 184 949 4.72 5.66 4.90 3,612 1,041 ,6531972 831 207 1,038 5.11 6.0o4 5.29 4,24)4 1,251 5,h951973 910 202 1,112 5.69 6.73 5.88 5,178 1,35Q 6,5371974/75 990 234 1,224 6.12 7.05 6.30 6,059 1,650 7,7091575/76 1,059 266 1,325 6.12 7.29 6.35 6,481 1,939 8,4201976/77 1,029 282 1,331 6.70 7.40 6.85 7,028 2,087 9,1151977/78 1,083 305 1,388 7.40 7.65 7.46 7,622 2,220 9,8421978/79 1,108 326 1,434 7.90 7.86 7.89 8,532 2,500 11 ,0321979/80 1,133 348 1,481 8.50 8.50 8.50 9,630 2,958 12,588

(continued)


INDONESIA



II. Operating Expenses

(a) Labor Costs

Number of men employed:

At end Active Non-active (on Equated - Number Averageof year service 80% of full pay) of men on full pay for year

1972 63,644 9,892 71,558 72,0001973 61,500 9,138 68,810 70,1841974 59,530 10,050 67,570 68,1901975 56,900 9,800 64,740 66,1551976 54,500 9,000 61,700 63,2201977 52,100 8,400 58,820 60,2601978 49,900 7,700 56,060 57,4401979 48,000 7,500 54,000 55,030

Cost per man: (Rp) Total costs: (Rp million)

Salary, Rice, sugar, Salaries, Rice, sugar, Severanceallowances etc. allowances etc. Pay Total

1972 54,000 33,000 3,437 2,100 571 6,1081973 81,500 40,000 5,012 2,460 888 8,3601974/75 115,000 40,300 6,251 2,399 1,306 9,9561975/76 125,000 40,300 7,112 2,293 1,375 10,7801976/77 135,000 40,300 7,358 2,196 1,335 10,8891977/78 145,000 40,300 7,554 2,100 1,313 10,9671978/79 150,000 40,300 7,485 2,011 1,234 10,7301979/80 155,000 40,300 7,440 1,934 1,232 10,606

(b) Locomotive Fuel

Loco-km (million) Total cost (Rp million)

1971 1979 1971 1979

Main line:Steam 11.8 1.0 1,462 125Diesel 18.5 30.4 555 912Electric 0.2 1.7 14 119

ShuntingSteam 4.7 1.0 235 50Diesel 2,4 6.0 48 120

37.6 40.1 2,314 1,326

Add for increase in gross ton-km per train-km(30% of main line consumption) 347

1,673Add for price increase 66 2/3% 1,115

Estimate 1979: 2,788

(c) Other Materials

The estimate for 1979/80 is based on the following assumptions:

The 1972 consumption of material was about 30% below the standardnecessary for efficient repair and maintenance.

Volume of output in 1979 will be 25% greater than in 1972.

Price inflation will be about 40%.

Hence: Expenditure 1979 will be:

1.30 x 1.25 x 1.40 x Rp 1,715 million (expenditure 1972)

Rp 3,900 million.

INDONESIA


INDONESIAN STATE PAILWAYS

Cash FlowFigures in Rupiah million

January/ TotalMarch 1974/75 to

1969 1970 1971 1972 1973 1974 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1979/80

Source of Funds:

Operating revenue 9,839 10,364 11,418 13,219 15,544 4,300 17,787 19,549 20, 750 23,194 26.181 29,360 136 821

Less: Cash operating expenses 9.815 10,238 11.804 13.187 16,580 4 500 19,640 21,069 21.478 21.388 21.188 21_216 125'979Net cash generation from operations 24 126 (386) 32 (1,036) (200) (1,853) (1,520) (728) 1,806 4,993 8,144 10,842Estimated savings from closure ofuneconomic lines, and/or Statesubsidy for continued operationof such lines for social reasons - 800 870 925 980 1,052 4,627

Sale of scrap and recoveredmaterials - - - - - - - 200 300 300 - - 800

Decrease in working capital(excluding cash and inventories) - 2,462 _ 1,024 - - 100 100 - _ _ 200

Government contribution tocapital investment:

Repelita I:From bilateral loans 2,302 2,242 1,159 1,316 1,244 400From internal resources 2,934 2,617 3,150 3,533 3,485 1,200

Repelita II:From bilateral loans andother sources includingIBRI) - - - - 5,000 9,500 12,700 12,000 10,000 8,450 57,650From internal resources - - - - - - 5,000 5,900 9,390 5,475 551 - 26,316Other capital works - - - - 500 200 250 250 - - - - 500

Government contribution toworking capital - - - - 433 100 1,108 47 - - 1,155

Government subsidy of cashoperating deficits - - - - 1,036 200 1,853 1,520 728 - - - 4,101

Adjustments of Government equity 5,628 (1,018) 2,118 346 - - - - - - - - -

Total Funds Available 10,888 6,429 6.041 6,251 5,662 1,900 11.358 16,797 23.360 20,506 16,524 17,646 106,191

Application of Funds

Capital investment:Repelita I 5,236 4,859 4,309 4,849 4,729 1,600 - - - - - - -

Repelita II:Fixed Assets - - - - - - 9,600 15,700 22,200 19,070 15,740 16,750 99,060Replenishment of

inventories - - - - - - 400 800 910 700 700 490 4,000

Other capital investment 389 1,253 578 888 500 200 250 250 250 250 250 250 1,500Increase in working capital

(excluding cash and inventories) 5,035 - 905 - - - - - - -Increase in inventories 620 497 2017 379 100 20 - - - - - -

Total Funds Applied 11,280 6.609 5,992 6,116 5,329 1.820 10,250 16,750 23,360 20,020 16,690 17,490 104,560

Cash balance at beginning of period 909 934Cash surplus (or deficit) during S

the period (392) (180) 49 135 333 80 1,108 47 - 486 (166) 156 1,631Cumulative cash balance 517 337 386 521 854 934 2,042 2,089 2,089 2,575 2,409 2,565 2,565 m

Source: Indonesian State Railways and Bank mission staff.April 1974

INDONESIA



Balance Sheets(in Rp. Millions)

ReconstructedBalance Sheet

Actual, as of December 31, as of March 31, Projected, as of March 31,1968 1969 1970 1971 1972 1974 1975 1976 1977 1978 1979 1980

Fixed Assets 4,874 5,270 6,523 7,098 7,985 212,455 222,305 238,255 260,705 280,025 296,015 313,015Less: Depreciation 122 249 399 608 846 115.030 120,310 125,830 131.590 137.590 143,840 150,340Net Fixed Assets 4,752 5,021 6,124 6,490 7,139 97,425 101,995 112,425 129,115 142,435 152,175 162,675

Current Assets

Cash 909 517 337 386 521 934 2,042 2,089 2,089 2,575 2,409 2,565Receivables 700 1,853 2,261 1,765 1,722 1,722 1,771 1,971 2,271 2,471 2,671 2,971Inventories 1,343 1,963 2,460 2,660 3,039 2,159 2,559 3,359 4,269 4,969 5,669 6,159Suspense Accounts 773 1,722 2,710 2,763 3,682 2,000 2,000 1,900 1,800 1,800 1,800 1,800Total Current Assets 3725 6,055 7,768 7,574 8,964 6,815 8,372 9,319 10,429 11,815 12,549 13,495Total Assets 8 477 11 076 13.892 14.064 16.103 104.240 110.367 121,744 139.544 154.250 164.724 176,170

Current Liabilities

Creditors 5,603 2,180 4,457 2,560 2,254 2,254 2,300 2,500 2,800 3,000 3,200 3,500Suspense Accounts 1,871 2,361 4,491 6,697 2.697 2J70 2,700 2.700 2,700 2,700 2.700Total Current Liabilities 7,474 4,541 8,399 7,051 8,951 4.951 5,000 5,200 500 5,700 5,900 6,200

Government Equity 1,309 6,937 5,983 8,037 8,382 108,085 121,296 138,513 161,331 178,806 189,357 197,807Less: Operating Deficits 306 402 490 1,024 1230 8,796 15.929 21,969 27.287 30,256 30,533 27,837

1,003 635 5,493 7,013 7,152 99,289 105,367 116,544 134,044 148,550 158,824 169,970Total Liabilities 8,47 11,07 6 13.892 14.064 16.103 104.240 110,367 121,74

4139,544 154.250 164,724 76,170

Current Ratio 0.5/1 1.3/1 0.9/1 1.1/1 1.0/1 1.4/1 1.7/1 1.8/1 1.9/1 2.0/1 2.0/1 2.1/1Liquid Ratio 0.3/1 1.1/1 0.6/1 0.8/1 1.0/1 1.2/1 1.7/1 1.6/1 1,6/1 1.7/1 1.6/1 1.6/1

Notes on Reconstruction of Balance Sheets as of March 31, 1974

I. Fixed Assets II. Government EquityRp. Million

PJKA revalued its assets in 1967 and assessed the written down value Book value as of December 31, 1972 8,382as Rp. 67 billion at that time. Adjusting that figure for inflation Capital investment, actual and projectedin the five years to 1972 and adding capital investments in the years January 1973-March 1974 6,3291968-72 plus a tentative value of further investment to March 31, 1974 14,711produces the valuation, gross and net shown above. Adjusted book value of fixed assets

as of December 31, 1972 95,726Less: Book value at same date 78139 88,587

103,298

Government Support of railway operationsJanuary 1973-March 1974 2,469

Adjustment of uncleared suspense account items (net) 2,318

Source: Indonesian State Railways and Bank mission staff 108,085May 1974

TABLE 13

INDONESIA

APPRAISAL OF A RAILv'AY PROJECT


Passenger Traffic Costs

Year 1973

Section: Jakarta - Bandung - Jakarta

Train - Day ExpressComposition - 5 Second, non-airconditioned

1 Restaurant, non-airconditioned

Locomotive - 1 DieselTrain Load - 200 tons, including passengers and baggageLoad including locomotive - 290 tonsNo. of seats, 5 cars x 60= - 300

Statistics for One-way Train Journey

Train-km - 174Passenger car-km - 1,044Locomotive-km, shed-shed(say)- 180Gross ton-km, includinglocomotive - 50,46oPassenger car-days (3single trips daily perset of 6 cars) per trip - 2

Seat-km - 52,200

Long-run Variable Cost(including depreciation and interest 5% on renewable investment)

Unit Cost No. of Units Cost (Rp.)(Rp.)

151.00 Locomotive costs 180 27,18041.50 Train crew costs and miscellaneous

supplies 174 7,2212,290.00 Car-day costs 2 4,580

10.00 Car-km costs 1,O04 10,4 400.393 Track costs 50,46o 19,83128.90 Administration and service 17)4 5,029

TOTAL 74, 281

Cost per seat-km 1.42Cost per passenger-km @ 80% seat occupancy 1.78Revenue per passenger-km 7.18

Source: Indonesian State Railways and Bank mission staff.

December 1973

INDONES IA



Java Lines Figures in Rupiah millionCost Analysts - 1971

Total Fixed Long-run Analysis of long-run Variable Costcost cost variable

cost Passenger Freight Service- Administration Steam locus. Diosel locos. Train Wagon Track Terminals

Head Office Expenses:Staff 190.5 162.0 28.5 17.1 11.4General charges 137.8 116.8 21.0 12.6 8.4

Payments in kind:Rice and sugar 1,789.4*

New year allowances 60.8*Uniforms 194.1 - 194.1 96.1 12.8 14.0 9.2 49.4 12.6Education 25.8 20.6 5.2 3.1 2.1Health services 14.1 11.3 2.8 1.7 1.1General charges 204.0 174.0 30.0 18.0 12.0Regional offices:

Administration 192.2 163.4 28.8 17.3 11.5Way and works 17.3 14.7 2.6 1.6 1.0Equipment maintenance 12.0 10.2 1.8 1.1 .7Operations 19.1 16.3 2.8 1.7 1.1Signals 16.6 14.1 2.5 1.5 1.0Vehicles 76.2 64.8 11.4 6.8 4.6Health 7.0 6.0 1.0 .6 .. 4Office expenses 58.8 50.1 8.7 5.2 3.5Printing 61.3 52.3 9.0 5.4 3.6Claims .7 - .7 .4 .3Advertising 1.1 .9 .2 .1 .1General charges 6.9 5.9 1.0 .6 .4Supplies and logistics 84.8 67.8 17.0 10.2 6.8

Way and works:Supervision 115.4 92.4 23.0 13.5 9.5Labor costs:Signals and telegraphs 118.4 118.4Bridge and crossing guards 101.4 101.4 .Track maintenance 400.0 240.0 160.0 93.6 66.4Right-of-way maintenance 270.4 270.4 -Buildings maintenance 48,8 48.8Material costs:Track 173.6 - 173.6 101.6 72.0Ballast 19.6 19.6Buildings and structures 94.1 94.1Signals and telecommunications 211.2 211.2 3.1Miscellaneous 30.2 22.7 7.5 4.4Other costs:Office equipment 19.3 14.5 4.8 2.8 2.0

Carried forward 2,922.7 2,184.7 738.0 417.0 70.0 12.8 14.0 9.2 153.0 49.4 12.6'5.-S

* These costs are allocated to relevant expense heads pro rata to the number of staff employed 0

on each service. -

Source: PJRA and Bank mission staff.December 1973

INDONESIA

3PPRAISAL OF A RAILWAY PSOJECT

INDONESIAN STATE RAITLWAYS

Java Lines

CGst Analysis - 1971 Figures in Rupiah million

Total Fixed Long-run Ana.ysis of Loe-run Variable Cost

cost cost variable Passenger Freight Service

cost Administratuon Steam iocos. Diesel iocos. Train Wagon Track TerminsaIs

Brought forward 2,922.7 2,184.7 738.0 417.0 70.0 12.8 14.0 9.2 153.0 49,4 12.6

Day and works:Other coats (continued)

Watchmen .1 .1 -

Light 2.4 2,4 -1.3

Office expenses 12.6 9.6 3.0 1.7

Price escalation (differencein inventory valuations) 32.2 - 32.2 18.8 13.4

General expenses 7.9 5.9 2.0 1.2 .S

Bridge section:Staff 134.0 134.0 -

Materials 17.5 17.5

General expenses 5.7 5.7

Line msintenanes and operation of

locomotives and rolling stock:Staff costs:

Supervision 30.8 24.6 6.2 2.5 1.4 .5 .1 .6 .8 .3

Locomotive crews 469.2 - 469.2 185.0 60.4 64.3 110.0 49.5

Running shed maintenance:Steam locomotives 70.1 - 70.1 19.0 22.9 22.3 5.9

Diesel locomotives 68.0 . 68.0 38,6 16.8 8.3 4.3

Electric locomotives 10.8 - 10.8 10.8

Passenger cars - line maintenance 114.1 - 114.1 114.1

Freight cars - line maintenance 290.4 - 290.4 261.4 29.0

Brakemen 96.0 - 96.0 96.0

Water supplies 2.9 2.9 -

Electricity distribution services 14.3 14.3Electric lighting 46.8 46.8 -

Road vehicles 15.9 12.9 3.0 1.2 .7 .2 .3 .4 .2

Materials:Locomotives - steam 63.0 - 63.0 17.1 20.5 20.1 5.3

Locomotives - diesel 61.5 - 61.5 34.9 15.2 7.5 3.9

Locomotives - electric 10.8 - 10.8 10.8

Passenger cars 86.0 - 86.0 86.0

Freight cars 30.0 - 30.0 27.0 3.0

Electric equipment for steamlocomotives 2.7 - 2.7 .7 .9 .9 .2

Fuel - diesel locomotives 481.0 - 481.0 289.2 146.4 30.0 15.4

- steam locomotives 1,321.0 - 1,321.0 443.9 612.9 211.4 52 8

Lubritats - diesel so -coative- 85.0 - 85.0 51.2 25.9 5.3 2:6

- steam locomotives 35.4 - 35.4 12.0 16.3 5.7

Electric power - electric locomotives 14.2 - 14.2 14.2

Lubricants - electric locomotives 1.3 - 1.3 1.3 1

Carried forward 6,556.3 2,461.4 4,094,9 1,771.2 70.0 749.0 283.3 105.3 289.3 168.3 472.1 186.2

t'

INDONESIA



Java Lines Figures in Rupiah million

Cost Analysis - 1971

Total Fixed Long-run Analysis of Long-run Variable Cost


cost Administration Steam locos. Diesel locos. Train Wagon Track Terminals

Brought forward 6,556.3 2,461.4 4,094.9 1,771.2 70.0 749.0 283.3 105,3 289.3 168.5 472.1 186.2

Line maintenance and operation oflocomotives and rolling stock:

Water - steam locosotives 51.3 - 51.3 17.3 23.9 8.2 1.9

- diesel locomotives 3.1 - 3.1 2.0 1.0 .1

Electricity for depots 19.5 19.5 -

Maintenance of plant and equipment 63.5 50.8 12.7 5.1 2.9 1.0 .1 1.3 1.6 .7

Lighting of yards and depots 13.1 13.1 -

Office expenses 14.8 11.1 3.7 1.5 .8 .3 - .4 .5 .2

Road vehicles 49.0 36.8 12.2 4.9 2.8 1.0 .1 1.2 1.5 .7

Maintenance of electric traction 1.4 - 1.4 .6 .3 .1 - .1 .2 .1

Maintenance of line installations 1.9 1.9 -

Miscellaneous expenses 22.7 6.0 16.7 6.7 3.8 1.3 .1 1.7 2.2 .9

Train and yard operation:Supervision 43.1 32.0 11.1 4.9 .5 5.6 .1

Train crews 192.1 - 192.1 149.8 33.8 8.5

Station staff 955.5 715.5 240.0 120.0 120.0

Yard staff 238.0 47.6 190.4 190.4

Delivery costs 5.2 - 5,2 5.2

Maintenance of plant and equipment 19.8 15.8 4.0 1.8 .2 2.0

Watchmen 1.8 1.8

Lighting 19.2 19.2 -

Office expenses 40.7 32.7 8.0 3.6 .4 4.0

Wagon seals, etc. 1.1 - 1.1 1.1

Water for stations .8 .8

Tickets 5.0 - 5.0 5.0

Claims .1 - .1

Miscellaneous 35.6 26.6 9.0 4.0 .1 4.5

Workshops; . 5

Administration 13.6 11.6 2.0 1.2 .2 .2 .2 .1

Supervision and labor:Steam locomotives 23.0 - 23.0 8.0 9.7 3.5 1.8

Diesel locomotives 60.0 - 60.0 37.8 16.1 3.7 2,4



Freight cars 21.9 - 21.9 19.9 2.0 s m

Watchmen 11.8 11.8 -

Motor vehicles 2.2 1.8 .4 .2 .1 .1o

Health service 6.9 5.9 1.0 .6 .1 .1 .1 .1

Carried forward 8,561,9 3,523.7 5,038.2 2,214.1 70.0 793.6 304.4 141.1 314.3 168.5 826.6 205.6

INDONES IA

APPRAISAT, OF A RAILWAY PRO7ECT


jva- Li".s Figures in Rupiah million

Cost AsalyXs&s - 1971

Total Fixed Long-rtn Analysis of Long-run Variable Cost


cost Adiuiistration Steam loco}, Diesel locos. Train Wagon Track Teminals

Brought forward 8,561.9 3,523.7 5,038.2 2,214.1 70.0 793.6 304.4 141.1 314.3 168.5 826.6 205.6

Workshops (continued):Materials:

Steam locomotivas 52.7 - 52.7 18.4 22.3 8.0 4.0

Diesel locomotives 51.7 - 51.7 32.6 13.8 3.2 2.1



Freight cars 30.1 - 30.1 27.1 3.0

Plant maintenance 24.1 19.1 5.0 3.0 .5 .4 .7 .2 .2

Motive power expenses (trials) 31.3 31.3 15.6 4.4 6.0 3.1 2.2

Puel 22.2 . 22.2 11.1 3.1 4.3 2.2 1.5

Lubrication 6.6 - 6.6 3.3 ,9 1.3 .7 .4

Water 6upply 1.1 1.1 -

Transportation and cleaning 14.7 9.7 5.0 3.0 .5 .4 .7 .2 .2

Watchmen 3.8 3.8 -

Lighting 8.0 8.0 -

Office expenses 5.4 4.3 1.1 .7 .1 .1 .1 .1

Printing 3.1 2.5 .6 .4 .1 .1

Motor vehicles 14.5 11.6 2.9 1.7 .3 .3 .4 .1 .1

Workshops allowances 28.3 28.3 18.7 1.6 2.6 3.3 1.2 .9

health service 1.1 ,9 .2 .1 .1

Building maintenance 8.0 8.0 -

Mise.llaneo.us 34.1 27.3 6.1 4.1 .6 .5 .9 .4 .3

Printing and other ancillary servicesWages, salaries, allowances 76.9 76.9

Miscellaneous 22.7 22.7 -

Accident repairs 64.0 64.0 38.4 25.6

Total, excluding depreciation 9,115.3 3,719.6 5,395.7 2,414.2 95.6 828.0 334.1 141.1 347,7 168.5 845.9 220.6

Depreciation (see page 7):Rails and fittings 470.0 - 470.0 276.0 19b.0

Turnouts 80.D - 80.0 31,2 20.4 26.7 1.7

Sleepers 400.0 360.0 40.0 23.4 15.3 1.3

Locomotives, diesel 814.9 - 814.9 463.7 202.0 97.2 52.0

Passenger cars: air conditioned 79.8 - 79.8 79.8

other passenger cars 180.7 - 180.7 180.7

baggage & bLak vans 18.2 - 18.2 18.2

mail vans 2.3 _ 2.3 2.3

Freight oars 445.0 - 445.0 445.0

Other assets 15500.0 1.500.0 - -

Total, including depreciation 13,106.2 5,579.6 7,526.6 3,489.5 95.6 828.0 536.1 141.1 792.7 398,2 969.8 275.6 a

INDONESIA



Java Lines

Cost Analysis - 1971 Figures in Rupiah million

Analysis of Lorg-run Variable Cost

long-ran ___ Freight

Total Fixed variable Passenger Steam Diesel Service

cost cost cost Administrative Locos. Locos. Train Wagons Track Terminals

Operating expenses, brought forward 13,106.2 5,579.6 7,526.6 3,489.5 95.6 828.0 536.1 141.1 792.7 398.2 969.8 275.6

Interest on renewable investment,

at assumed average rate of 5% p.a.

Track:Rails and fittings 980.0 980.0 575.5 404.5Sleepers 150.0 135.0 15.0 8.8 5.7 .5Turmouts 200.0 200.0 78.0 51.0 66.8 4.2

Locomotives, die sel:

Main-line 422.0 422.0 253.5 168.5

Shunting 258.0 258.0 133.5 81.1 43.4Freight cars 580.0 580.0 580.0

Passenger cars:

Air-conditioned 70.0 70.0 70.0

Other passenger cars 295.0 295.0 295.0

Baggage and brakB vans 34.0 34.o 344.0

Mail vans 5.0 5.0 5.0Other renewable assets 1,500.0 1,500.0 _ __ _ e

0 ~Total railway costs 17,600.2 7,214.6 10,385.6 4,942.8 95.6 828.0 704.6 141.1 1,372.7 859.4 1,117.7 323.7

_ __ _ _ >~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~'

oa

INDODIESIA TABLE 14

APPRAISAL OF A RAILdIAY PROJECT Page 6 of 14 pages


Java ines

Use-Depreciation of Fixed Assets

Basis of Calculation - 1971

Rails and Fittings (average replacement cost Rp. 8 million per km)

Life 100 million gross tons (incl. locomotives)

Depreciation Rp. 0.08 per gross ton-km

1971 Passenger 3,450 million gross ton-km = Rp. 276 million

Freight 2,427 million gross ton-km - Rp. 194 million

Locomotives: Replacement cost Life in km DepreciationRp. RP. per km

Steam, main-line 48,000,000 3,000,000 nil

Steam, shunting 40,000,000 2,000,000 nil 1/

Diesel, main-line 129,000,000 3,000,000 43.0

Diesel, shunting 82,000,000 2,000,000 41.0

Electric 96,000,000 3,000,000 nil -

1/ Fully depreciated, Future costs assume full dieselization

Freight Cars: Bogie

(a) Four-wheeler: average replacement cost Rp. 2.9 million

Life 800,000 km

Depreciation per km - Rp. 3.63

(b) Bogie: average replacement cost Rp. 6.25 million

Life 1,000,000 km


Passenger Cars:

(a) Air-conditioned cars: Bodies, underframes and bogies - average replace-ment cost Rp,. 31.0 million

Life 3.1 million km

Depreciation per km - Rp. 10.00.

TABLE 14Page 7 of 1)t pages

(b) Air-conditioning equipment: average replacement cost Rp. 12.0 million

Life 1.55 million km

Depreciation per kIm, - Rp. 7.74

(c) Other passenger cars: average replacement cost Rp. 25 million

Life 410 million km


(d) Baggage, brake and mail cars: average replacement cost Rp. 20 million

Life 4,.0 million km


(e) Old unbraked stock: fully depreciated, Future costs will be projected

on basis of rehabilitation or replacement.




Java Lines

Calculation of Interest on Renewable Investment

1971

Assumed average rate of interest 5%

Total(Rp. million)

Track: Rails and fittings - 4,780 km @ Rp. 8.2 million 980Sleepers, 6 million @ Rp. 1,000 (10%) 150.Turnouts 200

Locomotives, diesel - main-line131 it Rp. 129 million 422

Locomotives, diesel - shunting126 @ Rp. 82 million 258

Freight cars8,000 @ Rp. 2.9 million 580

Passenger cars:air-conditioned

65 @ Rp. 43 million 70Other passenger cars

4713½ @ Rp. 25 million 295Baggage and brake vans

68 6 Rp. 20 million 34Mail vans

10 @ Rp. 20 million 5

Other renewable assets '1, 500

Total 4,494

INDONESIA



Java Lines

Freight and Passenger Traffic Costs 1971 and 1973

No. of Unit Cost 1971 Total Cost 1971 No. of Unit Cost 1973 Total Cost 1973units Including Excluding Including Excluding units Including Excluding Including Excluding

Unit 1971 interest @ 5% interest interest interest 1973 interest @ 5% interest interest interest(Million) (Rupiah) (Rp. Million) (Million) (Rupiah) (Rp. Million)

Freight Traffic Costs:

Locomotive costs:Steam Loco-km 4.00 207.00 207.00 828 828 3.74 227.00 227.00 849 849Diesel Loco-km 4.77 147.70 112.35 705 536 5.01 164.00 128.65 822 645

Train costs Train-km 8.10 17.42 17.42 141 141 8.20 26.00 26.00 213 213Track costs Gross ton-km 2,316 0.358 0.168 829 389 2,646 0.393 0.203 1,040 537Locomotive, train and track

costs combined, assumingcomplete dieselization Gross trailing ton-km 1,687 1.34 0.90 2,265 1,515 1,910 1.40 0.98 2,688 1,876

Freight car costs:Provision, per diem Car-day 2.74 '231.30 19.60 634 54 2.74 241.00 29.30 660 80Movement, per km Car-km 113.00 6.23 6.23 704 704 134.00 7.53 7.53 1,009 1,009

Administration Train-km 8.10 11.80 11.80 96 96 8.20 16.30 16.30 134 134Terminal and intermediateyard movements Car-handled 1.40 798.35 692.71 1,118 970 1.40 1,004.00 898.36 1,406 1,258

Service train costs Train-km 8.10 14.71 12.52 119 101 8.20 18.40 16,21 151 133

Total variable costs, freight Net ton-km 7.65 6.76 4.99 5,174 3.819 9.26 6.79 5.25 6,284 4,858

Passenger Traffic Costs:

Locomotive costs:Steam Loco-km 3.41 189.05 189.05 645 645 1.38 211.00 211.00 291 291Diesel Loco-km 10.95 137.87 102.53 1,510 1,123 12.78 151.00 115.66 1,930 1,478Electric Loco-km 0.22 252.73 252.73 56 56 0.22 343.00 343.00 75 75

Train costs Train-km 13.90 27.88 27.88 388 388 13.90 41.50 41.50 577 577Passenger car costs:(a) Provision (No) (No)

Air-braked stockair-conditioned Car-day 20,440 3,992.18 567.52 82 12 20,440 4,270.00 845.34 87 17Other passenger cars Car-day 158,410 2,145.70 283.44 340 45 158,410 2,290.00 427.74 363 68Baggage, mail, etc. Car-day 25,550 1,776.91 250.49 .45 6 25,550 1,906.00 379.58 49 10Unbraked stock Car-day 461,725 140.13 140.13 65 65 409,895 210.00 210.00 86 86

(b) Movement (Million) (Million)Air-conditioned Car-km 6.10 22.75 22.75 139 139 7.30 25.25 25.25 184 184Other passenger cars Car-km 37.10 8.72 8.72 324 324 39.60 10.00 10.00 396 396Baggage, mail, etc. Car-km 7.20 6.38 6.38 46 46 7,90 7,08 7.08 56 56Unbraked stock Car-km 37.00 1.77 1.77 65 65 30.00 2.67 2.67 80 80

Track costs Gross ton-km 3,784 0.351 0.159 1,328 602 3,730 0.393 0.201 1,466 750Administration Train-km 13.90 7.55 7.55 105 105 13,90 10.50 10.50 146 146Service train costs Train-km 13.90 14.71 12.52 204 174 13.90 18.40 16.21 256 225

Total variable costs, passenger Pass-km 3,317 1.61 1.15 5,342 3,795 2,620 2.31 1.69 6,042 4,439 a r

Total long-run variable costs 10,16 7,614 12,326 9,297 MFixed costs 7.084 5.496 8,057 6,436

Total costs 17,60 13,100 20,383 15,733

TABLE 14

Page 10 of i pages

INDONESIA



Specimen Cost Sheet

Long-run Variable Cost - Year 1973

BIMA - Night Sleeping Car Express

Jakarta - Surabaya,Surabaya - Jakarta

6 airconditioned coaches, diesel hauled4-day car turnaround1,660 km round trip

Train-load 270 tons including locomotive

Rgp.

Loco cost, 1,660 km @ Rp. 151 250,660

Train staff costs, 1,660 km @ Rp. 41.50 68,890

Car costs:

Provision 6 cars x 4 days x Rp. 4,270 102,480

Movement 1,660 km x 6 cars x Rp. 25.25 251,h9o

Track costs, 270 tons x 1,660 km x Rp. 0.393 176,1i3

Administration and service train variable costs,

1,660 train-km x Rp. 28.90 47 974897,637

Long-run variable cost per train-km 5h0.75

Cost per passenger-carrying car (i.e. excluding

restaurant car and brake/air conditioning car) 135.1S

Cost per berth in 24 berth 1st Class Sleeper, at

805) occupancy 7. O4

Fare base per km (Rp. 6,900 per journey) 8.31


INDONESIA



specimen Cost Sheet

Long-rnm Variable Cost Year 1973

Fast Freight Trains

Jakarta - Surabaya - Jakarta

Net train-load 240 tons

Balance loading both directions

Gross train-load 400 tons

Load including locomotive 490 tons

No. of cars per train 22

Length of haul 725 km

Loco.-km, shed-shed, say 735 km

No. intermediate shuntingCar turnaround (say) 5 days

Lnrnariable Cost: Rp

Terminal cost, 3 movements (industry orgoods shed to yard, marshalling and yardto industry or goods shed) x 22 cars xRp. 1,004.00 66,264

Loco. costs, diesel, 735 km x Rp. 164.00 120,54o

Train costs, 725 km x Rp. 26.00 18,8o50Car costs:

Provision, 5 days x 22 cats x Rp. 241.00 26,510Movement, 22 cars x 725 km x lIp. 7.53 20,;Lo4

Track costs, 490 tons x 725 km x Rp. 0.393 139,613Administration and service, variable cost

0 Rp. 34.70 per train-km 25,158

Total variable cost per train L7 .030Per net ton-km= (US$1.04 per US ton-mile) I t-.7




Specimen Cost Sheet

Long-run Variable Cost - Year 1973

Ordinary Freight Service, Jakarta - Surabaya North Line

Surabaya Jakartato to

Jakar-ta Surabaya

Net train-load (tons) 320 79Net ton-kmi- 232,000 57,275Gross train-load (tons) 544 303Gross trailing ton-km 394,4o00 21Q,675Load iinJluding loco. (tons) 634 393Gross ton-Jon 459,650 28)4,925Nfo. of cars per train (Loaded) 32 8

(Empty) 2)4(Total) 32 32

Car-imo 23,200 23,200Length of haul (km) 725 725Loco.-lai shed to shed 735 7355 return empty haulage 75% NILCar turnaround (days) 16L 6Total car days 336 192Shunting moves per car at terminals (Loaded) 4 4

(Empty) 2 2No intermediate shuntingTotal shunting movements per train 128 80

Long-run Variable Cost:

Terminals shunting costs, e Rip. 1,004.00per movement 128,512 80,320Loco. costs, diesel, excluding fuel 735 km xRp. 126.55 93,01i4 3,0114Loco. fuel costs P' Rp. 0.106 per grosstrailing ton-lma 41,806 23,286Train costs, 725 km x iip. 26.00 18,850 18,850Adianistration and service train variablecosts e Rp. 24.70 per train km 25,158 254158

Total (Carried forward) 307,3)40 2)10,628


Rp- RP.

Brought forward: 307,340 21h0,628

Car costs:Provision, @ Rp. 241.00 per day 80,976 46,272Movement @ Rp. 7.53 per km 174,696 174,696

Track costsO@ Rp. 0.393 per gross ton-km 180,642 111,976

Total 743,654 673,572

Cost per net ton-km, round trip:RP. 743,654 + 673,572 = 1,417,226 =Net ton-km 232,000 + 57,275 289,275 Rp. 4.90

M4arginal cost of loading wagons on the back-haul,Jakarta - Surabaya, per net ton-km:

Rp. 743,654 - 673,572 = 70,082Net ton-km 232,000 - 57,275 174,725 Rp. 0.40

INDONESIA



Comparison of Revenue and Long-run Variable Cost of Individual Commodities.

Year 1972

Average Average length Revenue Long-run Variable Cost-/ Contributionwagon load % empty of loaded Tons Ton-km to fixedCommodity (tons) return haul haul (ki) (000) (Million) Per Ton Per Ton-km Total Per Ton Per Ton-km Total costs LossRp. Rp. Rp. Million Rp. Rp. Rp. Million Rp. Million Rp. Million

Sugar 12.0 71 455 112.9 51.4 1,836 4.03 207.3 1,910 4.19 215.6 8.3Rice 11.5 71 398 85.1 33.8 1,527 3.85 130.0 1,755 4.42 149.4 19.4Firewood 10.2 71 94 88.2 8.3 455 4.83 40.1 665 7.07 58.7 18.6Molasses 11.9 100 150 163.1 24.4 606 4.05 98.9 690 4.60 112.5 13.6Kerosene 23.0 100 176 552.3 96.9 1,101 6.27 607.9 555 3.16 306.5 301.4Gasoline 23.0 100 160 337.9 54.2 1,185 7.39 400.4 505 3.15 170.6 229.8Cement 21.0 71 456 154.8 70.6 1,647 3.61 254.6 1,670 3.66 258.5 3.9Stone 20.0 71 81 187.4 15.2 264 3.25 49.4 388 4.78 72.7 23.3Timber 11.0 71 417 96.4 40.2 2,114 5.07 203.8 1,900 4.56 183.2 20.6Fuel Oil 18.0 100 168 132.0 22.3 1,111 6.58 146.7 613 3.63 80.9 65.8Salt 11.0 71 476 37.4 17.8 1,583 3.33 59.2 2,135 4.48 79.8 20.6Fertilizer 15.0 71 227 91.2 20.7 977 4.31 89.1 900 3.97 82.1 7.0Sand 11.0 100 29 207.7 6.0 181 6.25 37.5 400 13.85 83.1 45.6Soya Beans 12.5 71 628 98.4 61.9 1,743 2.78 171.5 2,160 3.43 212.5 41.0Miscellaneous 10.0 71 390 786.6 307.5 2,057 5.64 1,618.5 1,940 4.96 1,526.0 92.5 2Livestock 5.0 100 543 30.2 16.4 4.274 7.87 129.1 5.071 9.34 153.1 24.03/Total 268 3,161.6 847.7 1.342 5.01 4.244,0 1.185 4.42 3745,2 717.1 218.3

1/ Long-run variable cost based on complete dieselization of motive power and modernization of rolling stock. Actual costs in 1972 were 16% greater than shown above,mainly because of higher steam locomotive costs. o2/ Long-run variable cost including depreciation, but excluding interest on renewable investment.

3/ Tons and ton-km include livestock, the figures for which were omitted from published statistics.

*0

INDONESIA

APPRAISAL OF A RAILWAY PROJECTINDONESIAN STATE RAILWAYS

Economic Analysis of the Investment Plan

Passenger Train Costs, 1973, and Projection for 1979, at Constant Prices,Java Lines

Long-run Variable Cost, 1973 1979

excluding Depreciation No. of Unit Total No. of Unit Total See

and Interest Charges: Unit Units Cost Cost Units Cost Cost Note

(million) (Rp) (Rp million) (million) (Rp) (Rp million)

Locomotive Costs:Steam Loco-km 1.38 211.00 291 - - -

Diesel Loco-km 12.78 79.42 1,015 14.75 80.00 1,180 1

Diesel Rail-cars Loco-km - - - 0.70 60.00 42 2

Electric Loco-km 0.22 343.00 75 0.22 300.00 66 3

Electric Rail-cars Loco-km - - - 1.45 80.00 116 2

Train Costs: Train-km 13.90 41.50 577 16.40 40.00 656 4

Passenger Car Costs:(a) Workshops

(i) Air-braked Stock (no) (no)

Air-conditioned Car-day 20,440 845.34 17 25,000 950.00 24 1

Other Passenger Cars Car-day 158,410 427.74 68 285,545 480.00 137 1

Baggage, Mail, etc. Car-day 25,550 379.58 10 30,000 430.00 13 1

(ii) Unbraked Stock Car-day 409,895 210.00 86 91,250 237.00 22 1

(b) Line Maintenance(i) Air-braked Stock (million) (million)

Air-conditioned Car-km 7.30 14.25 104 8.93 14.25 127

Other Passenger Cars Car-km 39.60 5.43 215 73.79 5.43 401Baggage, Mail, etc. Car-km 7.90 4.56 36 9.28 4.56 42

(ii) Unbraked stock Car-km 30.00 2.67 80 6.40 2.67 17

Track Costs: Gross Ton-km 3,730 0.1126 420 5,000 0.09 450 5

Administration Train-km 13.90 10.50 146 16.40 10.50 172

Service Train Costs Train-km 13.90 14.39 200 16.40 14.39 236

Total Variable Costs: Pass-km 2,400 1.39 3,340 3,335 1.11 3,7015

Fixed Costs 1,664 1 616

Total Costs (excludingDepreciation and Interest) Pass-km 2,400 2.09 5,004 3,335 1.59 5,317

Notes: ;

1. Increased consumption of materials 80% per repair, less 20% reduction in total cost resulting from workshops rehabilitation and m I

improved repair procedures. a m

2. Estimated; no existing data available. I w

3. Reduction in cost resulting from improved workshops practice. 0

4. Rail-car train crews estimated to cost less than those of conventional trains. a,

5. Estimated 20% reduction in track labor costs, variable and fixed, resulting from track rehabilitation and improved maintenance

procedures. so

Source: PJKA and Bank staff.

March 1974

INDONESIA

APPRArSAL OF A RArLWAY PROJECT

INDONESIAN STATE RAILWAYS - JAVA LINES (All figures at constant prices as of 1973/74.Operating costs exclude depreciation and interest.)

Economic Return for Passenger Services

-------- Without Railway Investment ------------ ------------- With Railway Investment -------------Net (Costs) or

Railway Road Railway Benefits fromYear Pass-km (million) Operating Capital Operating Total Capital Operating Total Railway

Total Rail Road Cost Cost Cost Cost Cost Cost Cost Investment-------------------------- Rp millio-n-----------------------

1973/74 2,400 2,400 - 5,004 - - 5,004 - 5,004 5,004 _1974/75 2,480 2,280 200 4,925 500 504 5,929 4,000 5,054 9,054 (3,125)1975/76 2,791 2,170 621 4,839 1,050 1,565 7,454 6,000 5,110 11,110 (3,656)1976/77 2,900 2,050 850 4,715 557 2,142 7,414 8,000 5,160 13,160 (5,746)1977/78 3,125 2,000 1,125 4,700 688 2,835 8,223 8,100 5,200 13,300 (5,077)1978/79 3,285 1,900 1,385 4,600 650 3,490 8,740 6,807 5,250 12,057 (3,317)1979/80 3,335 1,800 1,535 4,500 875 3,868 9,243 8,649 5,317 13,966 (4,723)1980/81 3,435 1,700 1,735 4,300 1,570 4,372 10,242 - 5,429 5,429 4,8131981/82 3,540 1,600 1,940 4,100 1,087 4,889 10,076 - 5,545 5,545 5,5311982/83 3,645 1,500 2,145 3,900 1,218 5,405 10,523 - 5,662 5,662 4,8611983/84 3,755 1,400 2,355 3,600 1,180 5,935 10,715 - 5,784 5,784 4,9311984/85 3,870 1,300 2,570 3,400 1,220 6,476 11,096 - 5,912 5,912 5,1841985/86 3,985 1,200 2,785 3,240 2,150 7,018 12,408 - 6,039 6,039 6,3691986/87 4,100 1,200 2,900 3,240 1,657 7,308 12,205 1,340 6,167 7,507 4,6981987/88 4,220 1,200 3,020 3,240 1,788 7,610 12,638 1,608 6,300 7,908 4,7301988/89 4,345 1,200 3,145 3,240 1,750 7,925 12,915 1,675 6,439 8,114 4,8011989/90 4,475 1,200 3,275 3,240 1,975 8,253 13,468 1,742 6,583 8,325 5,1431990/91 4,600 1,200 3,400 3,240 2,650 8,568 14,458 1,675 6,722 8,397 6,0611991/92 4,740 1,200 3,540 3,240 2,157 8,921 14,318 1,876 6,877 8,753 5,5651992/931/ 4,880 1,200 3,680 3,240 2,288 9,274 14,802 1,876 7,033 8.909 5.8931993/94- 5,000 1,200 3,800 3,240 (1,950) 9,576 10,866 (27,392) 7,166 (20,226) 31,092

Rate of Return 13.6%

Assumptions: (a) that without railway investment the railway's capacity to carry passengers will decrease by 50% in the course of the next 12 years;(b) that rail passenger traffic demand will accord with the forecast to 1979/80 and increase thereafter at 3% p.a.;(c) that, in the absence of railway investment, the excess of demand over rail capacity will be diverted to road;(d) that in such case the rail cost per pass-km will increase from Rp 2.09 in 1973/74 (see page I of this Table) to Rp 2.50 in 1979/80

and Rp 2.70 in 1985/86;(e) that road cost per pass-km, at standards of comfort, safety and service equivalent to rail, is Rp 2.52;(f) that a bus costs Rp 10 million; can carry the equivalent of 4 million pass-km p.a. and has a service life of 5 years or 500,000 km;(g) that if the railway investment program is undertaken, the railway will have capacity up to 4,000 million pass-km; and(h) that,if the proposed investment program is undertaken, the railway cost per pass-km will decline from Rp 2.09 in 1973/74 to Rp 1.59 in 1979/80

(page 1).

The investment includes:

Locomotives Passenger cars (new 60, rehabilitation 290) oDiesel rail-cars Track signals and telecommunicationsElectric rail-cars WorkshopsRehabilitation of existing rail cars Technical assistance, training and other minor investments.

1/ Includes residual value of equipment.

INDONESIA TABLE 15Page 3 of E pages


INDONESIAN STATE RAILWAYS - JAVA LINES

Freight Train Costs 1973 and Projection for 1979, at Constant Prices

1973 1979Long-run variable cost, No.of Unit Total No.of Unit Total Seeexcluding depreciation Units Cost Cost Units Cost Cost Noteand interest charges Unit (million) (Rp) (Rp million) (million) (Rp) (Rp million)

Locomotive costs:Steam Loco-km 3.74 227.00 849 - - -

Diesel Loco-km 5.01 88.42 443 7.50 90.00 675

Train costs Train-km 8.20 26.00 213 7.00 26.00 182Track costs Cross ton-km 2,646 0.116 307 3,100 0.093 288 2

Freight car costs:Car-day costs Car-day 2.74 29.30 80 3.10 23.50 73 3Car-km costs Car-km 143.40 3.93 564 172.60 3.50 604 3

Administration Train-km 8.20 16.30 134 7.00 16.30 114

Terminal and intermediateyard movements Car handled 1.40 810.00 1,134 1.70 739.00 1,256 4

Service train costs Train-km 8.20 13.05 107 7.00 10.00 70 4

Total variable costs: Net ton-km 926.00 4.14 3,831 1,149.00 2.84 3,262

Fixed costs 2,400 2,340 2

Total costs, excludingdepreciation and interestcharges Net ton-km 926.00 6.73 6231 1,149.00 4.87 5,602

Notes:1. Increased consumption of materials 80% per repair, less 20% total reduction in workshops cost,

due to rehabilitation and improved practices.2. Estimated reduction of 20% in track costs, variable and fixed, due to rehabilitation and improved

maintenance practices.3. Reduction in costs due to workshops rehabilitation and improved workshops and line maintenance

practices.4. Reductions in costs due to withdrawal of steam locomotives from service.

INDONESIA


INDONESIAN STATE RAILWAYS - JAVA LINES

Economic Return for Freight Services

------------ Without Railway Investment------------ ----------------- With Railway Investment--------

Net (Costs)Net ton-km (million) Railway Road Railway or Benefits

Operating Capital Operating Total Capital Operating Total from RailwayYear Total Rail Road Cost Cost Cost Cost Cost Cost Cost Investments

------------------------------------------…Rp. Nillion-------------------______________________________

1973/74 926 926 - 6,231 _ _ 6,231 - 6,231 6,231 -1974/75 1,006 1,006 - 6,560 - - 6,560 4,000 6,450 10,450 (3,890)1975/76 1,075 955 120 6,360 3,000 1,200 10,560 5,400 6,650 12,050 (1,490)1976/77 1,065 810 255 5,780 3,375 2,423 11,578 5,500 6,350 11,850 ( 272)1977/78 1,099 770 329 5,610 1,850 3,043 10,503 4,166 6,100 10,266 2371978/79 1,124 730 394 5,450 1,625 3,346 10,421 3,860 5,850 9,710 7111979/80 1,149 690 459 5,280 1,625 4,016 11,921 5,6021980/81 1,194 650 544 5,110 2,125 4,624 12,859 1,350 5,740 7,090 5,7691981/82 1,240 610 630 4,950 2,150 5,200 12,300 1,380 5,882 7,262 5,0381982/83 1,290 570 720 4,850 2,250 5,760 12,860 1,500 6,024 7,524 5,3361983/84 1,340 530 810 4,750 2,250 6,075 13,075 1,500 6,166 7,666 5,4091984/85 1,390 490 900 4,655 5,250 6,750 16,655 1,500 6,308 7,808 8,8471985/86 1,450 450 1,000 4,500 5,125 7,500 17,125 1,800 6,478 8,278 8,8471986/87 1,510 450 1,060 4,500 2,250 7,950 14,700 1,800 6,650 8,450 6,2501987/88 1,570 450 1,120 4,500 3,350 8,400 16,250 1,800 6,820 8,620 7,6301988/89 1,630 450 1,180 4,500 3,125 8,850 16,475 1,800 6,990 8,790 7,6851989/90 1,695 450 1,245 4,500 3,250 9,375 17,125 1,950 7,174 9,124 8,0011990/91 1,760 450 1,310 4,500 3,290 9,825 17,615 1,950 7,358 9,308 8,3071991/92 1,830 450 1,380 4,500 4,000 10,350 18,850 2,100 7,557 9,657 9,1931992/931/ 1,900 450 1,450 4,500 4,000 10,875 19,375 2,100 7,732 9,832 9,5431993/94- 1,970 450 1,520 4,500 (12,000) 11,400 3,900 (23,900) 7,939 (15,961) (19,861)

33.1%Rate of Return

Assumptions: (a) that without railway investment the railway's capacity to carry freight will decrease by 50% in the next 12 years;(b) that the demand for railway freight transport will accord with the forecast to 1979/80 and increase thereafter at 4% p.a.;(c) that, in the absence of railway investment, the excess of demand over railway capacity, will be diverted to road;(d) that, in such case, the rail cost per net ton-km will increase from Rp 6.73 in 1973/74 (page 3 of this Table) to Rp 7.65

in 1979/80 and Rp 10.00 in 1985/86;(e) that road costs per net ton-km are now Rp 10.00 (TCAS studies), but that with improved road standards and larger trucks

are likely to fall to Rp 7.50 by 1983/84;(f) that, at constant prices, future investment in trucks and/or locomotives and freight cars will be as follows:

Capital cost Capacity Capital cost Estimated Life(Rp million) (Net ton-km p.a.) (Per million net ton-km p.a.) (Years)

Truck 3.32 132,800 25 10 5 .Locomotive ) 2060 Freight Cars ) 600.00 20,000,000 30 35

(g) that,if the railway investment program is undertaken, rail costs per net ton-km (excluding depreciation and interest) will fallfrom Rp 6.73 in 1973/74 to Rp 4.87 in 1979/80 (page 3). °'

The investment includes: m

Locomotives Rehabilitation of freight cars Workshops rehabilitation and equipmentFreight cars Track, signals, telecommunications Technical Assistance, training and other minor investments.

1/ Includes residual value of equipment.

INDONESIA


INDONESIAN STATE RAILWAYS - SUMATRA LINES

Economic Return for Passenger Services

------------Without Railway Investment ------------- -----------With Railway Investment----------------

Year Pass-km (million) Railway Road RailwayOperating Capital Operating Total Capital Operating Total Net (Costs)

Total Rail Road cost Cost Cost Cost Cost Cost Cost or Benefits- - - - - - - - - - -- - - - - - - -Ep Million - - - - - - - - - - - - - - - - - - - - - - - - - -

1973/74 262 262 - 791 - - 791 - 791 791 -1974/75 280 250 30 813 75 135 1,023 500 809 1,309 (286)1975/76 298 238 60 828 75 270 1,173 1,000 822 1,822 (649)1976/77 318 226 92 838 80 414 1,332 1,000 836 1,836 (504)1977/78 340 214 126 843 85 567 1,495 1,100 850 1,950 (455)1978/79 364 202 162 842 90 729 1,661 1,100 863 1,963 (302)1979/80 389 191 198 840 165 891 1,896. 700 871 1,571 3251980/81 401 179 222 827 135 999 1,961 - 850 850 1,1111981/82 413 167 246 771 110 1,107 1,988 - 876 876 1,1121982/83 425 155 270 716 145 1,215 2,076 - 901 901 1,1751983/84 438 143 295 661 153 1,328 2,142 - 929 929 1,2131984/85 451 131 320 605 228 1,440 2,273 - 956 956 1,3171985/86 464 131 333 605 168 1,499 2,272 - 984 984 1,2881986/87 478 131 347 605 145 1,562 2,312 188 1,013 1,201 1,1111987/88 493 131 362 605 183 1,629 2,417 188 1,045 1,233 1,1841988/89 508 131 377 605 191 1,697 2,493 201 1,077 1,278 1,2151989/90 523 131 392 605 266 1,764 2,635 201 1,109 1,310 1,3251990/91 538 131 407 605 206 1,832 2,643 201 1,141 1,342 1,3011991/92 555 131 424 605 185 1,908 2,698 214 1,177 1,391 1,3071992/93 571 131 440 605 223 1,980 2,808 214 1,210 1,424 1,3841993/941/ 588 131 457 605 (323) 2,057 2,339 (3,812) 1,247 (2,565) 4,904


Assumptions: (a) that without railway investment the railway's capacity to carry passengers will decrease by 50% in the course of the next 12 years;(b) that rail passenger traffic demand will accord with the forecast to 1979/80 and increase thereafter at 3% p.a.;(c) that, in the absence of railway investment, the excess of demand over rail capacity will be diverted to road;(d) that in such case the rail cost per pass-km will increase from Rp 3.02 in 1973/74 to Rp 4.62 in 1980/81;(e) that road cost per pass-km, at standards of comfort, safety and service equivalent to rail, is Rp 4.50;(f) that a bus costs Rp 10 million; can carry the equivalent of 4 million pass-km p.a. and has a service life of 5 years of 500,000 km;(g) that if tle railway investment program is undertaken, the railway will have capacity up to 470 million pass-km; and(h) that, if the proposed investment program is undertaken, the railway cost per pass-km will decline from Rp 3.02 in 1973/74 to

Rp 2.12 in 1980/81.

0 U

a,

1/ Include residual values.

May 1974

INDONESIA


INDONESIAN STATE RAILWAYS - SUMATRA LINES

Economic Return for Freight Services

W---- ithout Railway Investment -------------- ---------------- With Railway Investment ----------

Net (Costs)Year Freight (million ton-km) Railway Road Grand Railway or Benefits

Operating Investment Operating Total Investment Operating Total from RailwayTotal Rail Road Cost Cost Cost Cost Cost Investments

------------------------------------ Rp Million -----------------------------------------------------

1973/74 202 202 - 1,899 - - 1,899 500 1,899 2,399 (500)1974/75 234 193 41 1,891 1,025 479 3,395 1,500 2,106 3,606 (211)1975/76 266 184 82 1,877 1,025 935 3,837 2,700 2,288 4,988 (1,151)1976/77 282 175 107 1,855 625 1,188 3,668 3,000 2,312 5,312 (1,644)1977/78 305 166 139 1,826 800 1,501 4,127 1,700 2,379 4,079 (48)1978/79 326 157 169 1,790 750 1,775 4,315 1,050 2,412 3,462 8531979/80 348 148 200 1,746 775 2,060 4,581 - 2,486 2,436 2,1451980/81 362 139 223 1,696 575 2,230 4,501 450 2,462 2,912 1,5891981/82 376 130 246 1,586 575 2,460 4,621 450 2,557 3,007 1,6141982/83 391 121 270 1,476 600 2,700 4,776 450 2,659 3,109 1,6671983/84 407 112 295 1,366 625 2,950 4,941 480 2,768 3,248 1,6931984/85 423 103 320 1,257 1,650 3,200 6,107 480 2,876 3,356 2,7511985/86 440 101 339 1,232 1,500 3,390 6,122 540 2,992 3,532 2,5901986/87 458 101 357 1,232 1,075 3,570 5,877 510 3,114 3,624 2,2531987/88 476 101 375 1,232 1,300 3,750 6,282 540 3,237 3,777 2,5051988/89 495 101 394 1,232 1,200 3,940 6,372 600 3,366 3,966 2,4061989/90 515 101 414 1,232 1,075 4,140 6,447 600 3,502 4,102 2,3451990/91 535 101 434 1,232 1,075 4,340 6,647 600 3,638 4,238 2,4091991/92 557 101 456 1,232 1,150 4,560 6,942 660 3,788 4,448 2,4941992/93 579 101 478 1,232 1,175 4,780 7,187 690 3,939 4,629 2,5581993/941' 602 101 501 1,232 (4,750) 5,010 1,492 (8,910) 4,094 (4,816) 6,308


Assumptions: (a) that without railway investment the railways' capacity to carry freight will decrease by 50% in the next 12 years;(b) that the demand for railway freight transport will accord with the forecast to 1979/80 and increase thereafter at 4% p.a.;(c) that, in the absence of railway investment, the excess of demandover railway capacity, will be diverted to road;(d) that, in such case, the rail cost per net ton-km will increase from Rp 9.40 in 1973/74 to Rp 12.20 in 1930/81;(e) that road costs per net ton-km are now Rp 12.00, but that with improved road standards and larger trucks are likely to fall to Rp 10.00

by 1980/81;(f) that, at constant prices, future investment in trucks and/or locomotives and freight cars will be as follows:

Capital cost Capacity Capital cost Estimated life(Rp million) (Net ton-km p.a.) (Per million net ton-km p.a.) (Years)

Truck 3.32 132,800 25 10Locomotive ) 2060 Freight Cars ) 600.00 20,000,000 30 35 m

(g) that, if the railway investment program is undertaken, rail costs per net ton-km (excluding depreciation and interest) will fallfrom Rp 9.40 in 1973/74 to Rp 6.80 in 1980/81. 0,

~0

1/ Include residual values.

May 1974

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Documents

World Bank Document · Indonesian State Railways (Perusahaan Jawatan Kereta Api - PJKA), with the objective of enabling the railways to reestablish and maintain both their proper