Monday, October 2, 2023

New Railway Networks LRT, MRT, High-Speed Train Bring Beneficial Economic Impacts

Trimurti, Nasori
July 11, 2023 | 5:35 pm
Light Rail Transit trains are seen at Jatimulya Railway Depot in Bekasi, West Java, Thursday, July 6, 2023. (Joanito De Saojoao)
Light Rail Transit trains are seen at Jatimulya Railway Depot in Bekasi, West Java, Thursday, July 6, 2023. (Joanito De Saojoao)

Jakarta. The arrival of new railway networks, including mass rapid transit (MRT), light rail transit (LRT), and the Jakarta-Bandung Fast Train, is expected to have significant benefits for society and generate a wide-ranging economic impact, according to officials and experts.

These new railway systems not only improve transportation efficiency but also stimulate the development of new economic activity centers and generate new sources of revenue for the surrounding population, with an estimated economic value addition of over Rp 800 trillion.

West Java Governor Ridwan Kamil emphasized the opportunity to develop a new city in Walini, an area known for its tea plantations, with the Jakarta-Bandung Fast Train. 

"With the presence of this high-speed train, building a new city in Walini becomes possible and viable," he said. "Millions of jobs will be created from there, and ultimately, it will lead to prosperity. Just and prosperity will hopefully be achieved as this project evolves." 

New Railway Networks LRT, MRT, High-Speed Train Bring Beneficial Economic Impacts
A high-speed train is parked at the Tegalluar Railway Depot in Bandung Regency, West Java, on Thursday, June 22, 2023. Kereta Cepat Indonesia China (KCIC) is currently working to obtain operational permits for the Jakarta-Bandung Fast Train ahead of its targeted launch in August 2023. (Antara photo/Raisan Al Farisi.)

Emir Monti, Corporate Communication Manager at Indonesia-China Fast Train (KCIC), said that high-speed trains can drive growth in new economic centers, where businesses can invest in areas surrounding the railway stations, creating new destinations for the community. 

Developing tourism locations, business centers, and residential areas around train stations can boost regional revenue and indirectly increase the number of fast train passengers, Emir said. 

Additionally, the fast train's reduced travel time between Jakarta and Bandung of just 45 minutes can enhance economic productivity.

The LRT that connects Jakarta and its satellite cities is expected to provide efficient and modern mass transportation, reducing traffic congestion, emissions, and fuel consumption, according to Faisal Yusuf, an official from the Investment Ministry.

He said the LRT will create job opportunities and foster the emergence of new business areas and centers of economic growth around its stations, contributing to more balanced economic growth in the region.

Esther Sri Astuti, Program Director of the Institute for Development of Economics and Finance (Indef), highlighted that infrastructure development such as the MRT and LRT drives economic growth by improving connectivity and facilitating human activities, leading to increased productivity and income generation. 

Policies supporting seamless intermodal transportation and accessible investment regulations around railway stations are crucial to maximizing the economic impact, she said.

According to a study by the University of Indonesia's Institute for Economic and Social Research (LPEM), the first two phases of the Jakarta MRT have indirectly contributed to fiscal revenue. MRT Jakarta phase 1 contributed around Rp 1.3 trillion in annual taxes to the central government, while phases 2A and 2B contributed Rp 1.2 trillion and Rp 333 billion, respectively. 

New Railway Networks LRT, MRT, High-Speed Train Bring Beneficial Economic Impacts
A Jabodebek Light Rail Transit (LRT) train enters Dukuh Atas Station in Jakarta on Thursday, July 6, 2023. (B-Universe Photo/Joanito De Saojoao)

The entire phases of MRT Jakarta also have the potential to generate Rp 811 billion in tax revenues per year for the Jakarta government.

Overall, the new railway networks in Jakarta are expected to drive economic growth, enhance connectivity, and provide numerous benefits for the community and the region.

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