TransJakarta Pledges to Be Subsidy-Free by 2019 After Fresh Business Plan
JANUARY 07, 2015
Jakarta. Bus operator TransJakarta has said the company will no longer depend on subsidies from the Jakarta city government to pay for operational and maintenance costs from as early as 2019.
The public transportation operator, which prior to becoming its own company last year was a unit within the Jakarta administration, has spent trillions of rupiah since the program began in 2004.
Last year, the city subsidy for the program, whose buses run on dedicated lanes, was more than Rp 830 billion ($65 million), a sharp increase from Rp 468 billion the previous year.
The subsidy is expected to balloon even further as the city government plans to add five more routes and impose vehicle restrictions on major streets across the capital.
The plans will increase the number of passengers using the bus network, which currently stands at 112 million trips a year.
Today, passengers pay Rp 3,500 each time they enter the integrated bus system, far below the cost to run it.
TransJakarta says it needs between Rp 80 billion and Rp 100 billion per month to pay for operational and maintenance costs, while ticket sales generate between Rp 28 billion and Rp 33 billion per month.
TransJakarta president director Antonius N.S. Kosasih acknowledged that the company had a daunting task ahead before it was sustainable.
Antonius said the company was keen to keep the transportation system affordable, adding that it was planning to be more aggressive in generating income from selling advertising spaces on board buses and in bus shelters.
The company is also planning to add more buses and refurbish its shelters, which Antonius said had the potential to also serve as commercial spaces.
“We spend more than we make,” Antonius said of the current business model, which relies heavily on ticket sales.
“That’s why we are formulating business strategies starting from improving service qualities, increasing the number of buses to boosting advertising revenues to support our enormous operational costs,” he said.
The city is planning to provide the newly established company with Rp 2 trillion in start-up capital, to cover this year’s overhead and implement the new strategies.
The start-up capital is included in this year’s provincial budget, which is still being deliberated by the City Council despite the end of 2014 deadline.
Council speaker Edi Prasetyo Marsudi said this was one plan the council was sure to endorse.
“We will support [TransJakarta’s goal],” he said. “Because [TransJakarta] subsidies need to be diverted to other programs like education and health for the people of Jakarta.”
Council members from the opposition parties pledged their support.
“We hope the capital will help TransJakarta to improve its service,” said Abdul Ghoni of the Great Indonesia Movement Party (Gerindra). “If we have more buses, less waiting time, comfortable bus shelters, the number of passengers will increase and buses and bus shelters can be used to generate advertising revenue.”