Jakarta is among the last Southeast Asian metropolises to build a mass transportation system. (Antara Foto/Zabur Karuru)

Alstom Targets Indonesia's Infrastructure Development


JUNE 14, 2015

Milan, Italy. Alstom, one of the world's largest manufacturers of high-speed trains and tramways, is seeking to win public transport orders from Indonesia over the next few years by taking advantage of the country's rapidly growing young population.

"We are ready to offer many things with our technologies and green products and when we get the chance to be a part of Indonesia's infrastructure development, we'll be ready because we [are] already there," said Sheldon Young, Alstom East Asia Pacific communication director.

The company is well aware of Indonesia's demographic dividend that could, if harnessed properly, spur rapid economic growth and potentially push massive development, including transportation in its cities.

Currently 65 million of Indonesia's of 250 million inhabitants are classified as young. The country has a declining dependency ratio — the ratio between unproductive people (bellow the age of 15 and above 65) and the productive ones — according to the United Nations Population Fund (UNFPA). UNFPA states these numbers present "an opportunity for high saving, high investment and in turn, high economic growth."

The demographic dividend will last until at least 2030, according to Indonesia's statistic agency (BPS). During that time, Alstom can make the most of it by offering state-of-the-art trains, tramways and metro to Indonesia, the company said.

"At the moment, we don't have an ongoing project in Indonesia, but we are there to stay. We wouldn't be in a country unless we are serious," Young said.

Alstom's presence in Indonesia can be traced back 49 years when the company established its first office in Indonesia. Three years later the company started a joint venture with Indonesia's state-owned electricity company, PLN, to manufacture transformers in the country.  At the time, Alstom was known as an energy and transportation company that operated in power generation, electrical grids and rail solutions.

Today, Alstom group still operates in energy sector, but that will change when General Electric (GE), a US-based technology and financial services company, acquires Alstom's energy-related business for 12.35 billion euros ($13.93 billion) next year.

The acquisition will bring enough cash for Alstom to enhance its presence in the transportation sector across the world, said Henri Poupart-Lafarge, Alstom Group executive vice president and president of Alstom Transport.

"I strongly believe, by being focus in transport, [...] it would create much more cohesiveness, dynamism, momentum in the company," he said, noting that Alstom will also acquire GE's Signalling, the company's rail signalling division, for 600 million euros.

"The 'New Alstom' will be refocused on transport activities such as trains [manufacturing], services, signalling and system [provider]," said Poupart-Lafarge.

During the UITP World Congress and Exhibition that showcases the latest technology in transportation in Milan last week, Alstom introduced a new integrated tramway system, called Attractis,. The system comprises tramway tracks, power supply, passenger stations, communication and information systems, line operation supervision, control systems and ticketing and maintenance in one package.

"Attractis allow cities, especially those experiencing rapid growth, to acquire a tramway system enabling them to rapidly reduce congestion and pollution while offering city-dwellers a clean, safe and comfortable mode of transport," said Eric Marie, Alstom Transport vice president in a statement.

This new integrated system will be offered to growing cities across the world, including Jakarta, Bandung and Surabaya, said Young. Most cities in Indonesia depend on private buses and mini-van services for transportation.

Jakarta eliminated tramways in the sixties to give way for motorized minivans, which are still in operation today in the capital.

The Jakarta administrative area, which is home to more than 11 million people, is undergoing several transportation projects such as the Jakarta Mass Rapid Transit (MRT) and the Light Rail Transit.

The city currently relies on disintegrated transportation system, such as Bus Rapid Transit called Transjakarta, private mini vans and bus services, as well as KRL Jabodetabek, an electrified railway that connects Jakarta with satellite cities Bekasi, Depok and Tangerang.

Surabaya, the capital of East Java, is starting to integrate its transportation system by building its first MRT to connect the city and surrounding areas.