Indonesia has been improving its public transit infrastructure, with the high-speed rail (HSR) connecting Jakarta and Bandung set to start commercial operation in October. The Greater Jakarta light rail system (LRT) recently went into service, and the Jakarta Mass Rapid Transit (MRT) has been open for a few years and is being extended. However, these projects have faced controversy regarding costs, planning, design, land acquisition, environmental impacts, and the use of foreign debt.
Investing in transportation aims to move goods and people more efficiently and acquire new technologies and know-how. This is important for emerging markets like Indonesia as it creates foundations for long-term growth. The government wants to acquire operational and production capabilities from foreign development partners to eventually be able to undertake complex transit projects themselves.
The Jakarta MRT is a Japan-backed project, while the Jakarta-Bandung HSR is being developed in collaboration with China. The LRT is a home-grown project run by state-owned companies. These projects have faced challenges, such as delays and operational issues, but they provide opportunities for Indonesian firms to acquire new skills and capabilities. The success of these projects should be assessed based on whether they contribute to the development of indigenous capabilities.
Despite the issues, the trajectory of Indonesia’s public transit systems shows progress in terms of local participation and ownership. The ultimate question is whether firms involved in these projects are learning and improving their techniques, skills, and knowledge over time. With the high demand for more public transit systems in Indonesia, the results of these endeavors should become apparent soon.
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