(On-site evaluation: July 2006)
Ex-Post Monitoring for Completed ODA Loan Projects

Evaluator: Kenji Momota (IC Net, Ltd.)
Project Name: Indonesia “Rehabilitation of Diesel Railcars Project (Phase 1), Diesel Railcar Rehabilitation Project (Phase 2)”(L/A No. IP-339, IP-470)
Loan Outline
Loan Amount/Disbursement Amount: Total:
5,931 million yen/5,448 million yen
Phase 1
4,819 million yen/4,477 million yen
Phase 2
1,112 million yen/971 million yen
Loan Agreement:
Phase 1
July 1988
Phase 2
December 1996
Loan Completion:
Phase 1February 1999
Phase 2March 1999
Ex-Post Evaluation:
FY2000Executing Agency:
Ministry of Transportation, Directorate General of Land Communication (DGLC)
Project Objective
By repairing diesel railcars and supplying parts for their maintenance, this project aims to reinforce rail transport capacity in the Jabotabek region and between other major cities, and thereby
contribute to increase passenger revenues and railcar safety and comfort.
Consultant: Japan Railway Technical Service (JARTS) (Japan)
Contractor: Sumitomo Corporation (Japan), PT. Humpus Trading (Indonesia)
Overview of Results
Item

At time of Ex-post Evaluation

Effectiveness &ImpactAt time of Ex-post Monitoring
Inadequate maintenance is a major cause of the deteriorating situation;
only about 60% of the rehabilitated railcars (32 railcars) are operating.
Passenger numbers are also falling, and one can say that theeffectiveness has become lower compared to the time of ex-postevaluation.

Effectiveness(1) Operating status of rehabilitated railcars (operating rate)
Through the project, necessary parts were provided and JICA dispatchedexperts to guide rehabilitation of 64 railcars (96 railcars were planned, but 32
railcars were removed from the project, and the scope was actually changed to64 railcars). The status is as follows:(1) Operating status of rehabilitated railcars
1. Operating status (as of July 2006)
The operating rate of rehabilitated railcars has fallen to about 62.7%. The falling
operating rate due to poor maintenance is becoming a problem, with somerailcars planned for disposal and nine railcars used as passenger cars with theirbroken engines etc

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・ Before project implementation: At the start of 1990, there werenearly 150 railcars. About 1/3 of these were operating.
・ After project implementation: At time of ex-post evaluation (year2000), there were at total 111 railcars. Of these, over 90 railcars werealways able to operate, and over 85 railcars were actually operating.

Table 1. Rehabilitated Railcar Operating Status (July 2006)
Number ofrailcars

Categorized by operating status

Operating normally
Used as passenger car(without engine)

32

SOSGO

Under periodic inspection

7SGO

Overhaul

6SGO

Undergoing rehabilitation again

6SGO

Planned for disposal

4Total64

9SO 32

SGO 51

Operating rate (SO/SGO)
62.7%
Source: Indonesian Railway LLC (PT. KAI below)
Note: SO = Number of railcars actually being operated
SGO = Number of railcars that can be operated(2) Improvement of transport capacity (passenger transport volume)(a) 40 out of the 64 railcars were reallocated in 1998, calculating with 24
railcars that had already been reallocated by the previous year.
(b) The trend in railroad passenger numbers is as follows. The rehabilitatedrailcars are mostly utilized to provide passenger transport service in
non-electrified sections of city outskirts. This is categorized as “Outskirts ofother cities” in the table below. Passenger numbers were increasing until thetime of ex-post evaluation. The project is seen to be contributing toimprovement of passenger transport capacity.

Jabotabek
outskirts
Outskirts
other cities<Trend in Railroad Passenger Numbers>
1995
1996
1997
1998
and
85.4
100.6
105.1
107.9
17.9%
4.4%
2.7%
of

1999
117.7
9.1%

24.7
-

23.5
-5.0%

23.8
1.2%

28.9
21.3%

30.9
7.1%

Intercity rail(wide area)

31.2
-

30.1
-3.4%

30.7
2.0%

32.8
6.9%

38.7
17.8%

Total passengers

141.3-

154.2
9.2%

159.6
3.5%

169.6
6.3%

187.3
10.4%

* Upper is annual passenger numbers (unit: million people), lower is growthover the previous year.

(2) Improvement of transport capacity (passenger transport volume)
Numbers of passengers transported by rehabilitated railcars continue to decline asshown in 1. below, “Outskirts of other cities.” Numbers have returned to the level
before the project was implemented.
1. Rail Passenger Numbers
2000

2001

2002

2003

2004

Jabotabek and outskirts

118.4
0.59%

121.5
2.62%

117.4
-3.37%

102-13.12%100.6-1.37%

Outskirts of other cities

32.1
3.9%

25.4
-20.9%

23-9.4%

26.2
13.9%

25.1
-4.2%

Intercity rail(wide area)

41
5.9%

40
-2.4%

35.5
-11.3%

25-29.6%

24.3
-2.8%

Total passengers

191.6
2.3%

186.8
-2.5%

175.9
-5.8%

153.3
-12.8%

149.9
-2.2%

* Upper is annual passenger numbers (unit: million people), lower is growthover the previous year.
Source: PT. KAI

2. Number of diesel railcars operating (July 2006)

2

* From PT. KAI data

Large reasons for the decrease in passenger numbers appear to be: (a) Reduced
number of operating railcars and trains due to poor maintenance, (b) Fewer
operating trains due to the switch to a new type (electric type) of diesel railcars,so that the transport capacity has decreased temporarily. In view of the highdemand of railway transportation in the urban metropolitan area and politicalview of air pollution policy against automobiles, the Ministry of Transportation isplacing its future efforts on diesel electric railcars, which are lower withmaintenance costs, planning to allocate 143 railcars by 2010. Still, the numbers ofdiesel railcars currently operating are as follows. The number of routes andtrains operating has fallen by about 50%, compared to the year 2000 (16 routes,114 trains running/day).

July 2006

Number ofroutes

Number oftrains
running
per day--

2

192

91

10

2

18

756

No. 1 Regional Division, Jakarta
No. 2 Regional Division,
Bandung
No. 5 Regional Division,Semarang
No. 6 Regional Division,
Yogyakarta
No. 8 Regional Division,Surabaya
Total
Source: PT. KAI
Impact(1) Increase in passenger revenues
Improvement in passenger transport capacity is also reflected in increased
revenues. (rehabilitated railcars are being utilized for passenger service in“Outskirts of other cities,” as mentioned above for railroad passenger numbers)

Jabotabek
and outskirts

1995
25.9
-

1996
37.2
43.8%

1997
43.3
16.4%

1998
47.0
8.6%

1999
54.1
14.9%

Outskirts ofother cities

10.4
-

11.7
12.6%

13.1
12.1%

17.3
32.0%

19.8
14.6%

Intercity rail(wide area)

306.2
-

382.9
25.0%

442.6
15.6%

607.3
37.2%

823.1
35.5%

342.4
-

431.8
26.1%

499.0
15.6%

671.6
34.6%

896.9
33.6%

Total
passengers(1) Increase in passenger revenues
Passenger numbers are in a downward trend, but due to effects of price rises,
passenger revenues are increasing. However, growth is slowing in recent years,
which appears due to:(a) Reduced railcar operating rate, (b) Development of competing means oftransport. In particular, the 2003 deregulation of the airline industry resulted in
more short-distance air routes. This is seen to be connected to limited growth inpassenger revenues for wide area intercity railroads.

Jabotabekandoutskirts
Outskirts
of other2000

2001

2002

2003

2004

68.7
27.0%

91.7
33.5%

118.9
29.7%

156.4
31.5%

169.1
8.1%

26.7
34.8%

28
4.9%

31.5
12.5%

71.1
125.7%

75
5.5%

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* Upper is annual passenger revenues (unit: billion rupiah), lower is growthover the previous year
* From PT. KAI data

citiesIntercity rail(wide area)
Total
passengers

981.8
14.7%

1,068.4
8.8%

1,251
17.1%

1,213.5-3.0%

1,213.8
0.02%

1,077.2
15.8%

1,188.1
10.3%

1,401.5
18.0%

1,440.9
2.8%

1,457.9
1.2%* Upper = annual passenger revenues (unit: billion rupiah), lower = growth overthe previous year
Source: PT. KAI(2) Other
The rehabilitation performed resulted in increased railcar safety, comfort, andconvenience, including decreased travel time.

(2) Other
1) Increased convenience
The reduced travel time and cost of diesel railcars is being sustained.
Example: Comparison of required time and fares for sections where diesel
railcars operate(Unit: fare = rupiah)
SampleSurabaya - Sidoarjo
Padalarang - Cicalengka
section(35km)(42km)TimeBus

Railroad

2 hours

1 hourBusAbout
1.75 hours
8,448

Railroad
About
50 minutes
2,979

Fare
9,000
5,000
Source: Questionnaire survey of passengers* 1 dollar = about 9,000 rupiah (about 115 yen).
* The Surabaya Kota – Jombang route which operated at the time of ex-post
evaluation is not currently operating.
In passenger interviews (50 people), about 58% gave price as the major reason(advantage) for using diesel railcars, 29% said reduced travel time.
2) Increase in safety and comfort
An increase in safety from doors closing while moving was mentioned by the
ex-post evaluation, and this is not thought to have changed since before theproject implementation. Open doors are mostly due to issues like crowded
conditions and humidity, not due to breakdown in railcars. Doors were open inalmost all diesel railcars that were actually traveled in on-site, and in otherrailcars observed. Similar comments were derived from questionnaire surveys ofPT. KAI and passengers, so it appears that increased safety through closing ofdoors is not being attempted.
Sustainability
The quality of regular maintenance, insufficient capacity to perform heavy
repairs, and lack of spare parts due to poor financial situation areaccelerating the deterioration of railcars. This is creating concerns aboutsustainability and the operation and maintenance situation.

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(1) Technical capacity
The Railcar Section is the organization that performs maintenance. It performs
maintenance by combining inspections at 1, 2, 3, 6, and 12-month intervals,
depending on each railcar’s status. Required numbers of staff, technical level,and supply of materials and equipment are not problems, but it is difficult forthe Railcar Section to handle the 12-month inspection, so that is done by therailcar repair yard under the direct management of PT. KAI.

(1) Technical capacity
There is no change in the maintenance structure managed by the Railcar
Section since the time of the ex-post evaluation. A training center which wasestablished in Bandung and Yogyakarta is training staff. Vocational highschool graduates comprise 98% of staff. Technical training is provided
designed to raise technical levels, with training provided after joining thecompany, and by type of job. Maintenance work on diesel railcars is not newtechnology, and there are not large problems with basic knowledge or training
details. However, the level of actual maintenance work is low (refer to (4)Operation and maintenance situation, below).
The number of staff in each region is as follows. According to PT. KAI, there
are no large changes in structure and staff numbers since the ex-post
evaluation, so no particular problems are seen regarding scale.
Table

Number of Railcar Section Staff, by Region
AreaStaff

No. 1 Regional Division, Jakarta50

No. 2 Regional Division, Bandung60

No. 5 Regional Division, Semarang

55

No. 6 Regional Division, Yogyakarta(Solo)

30

No. 8 Regional Division, Surabaya

70

Railcar repair yard (Yogyakarta)

600

Source: PT. KAI(2) Structural Organization
PT. KAI (Indonesian Railway Corporation) was corporatized (privatized) in1999 with 100% of its stock held by the government, from its previous form as
Perum KA (Indonesian Railway Public Corporation). Each department of PT.
KAI is the organization handling maintenance, with actual work such as regularinspections done by the Railway Section.

(2) Structural organization
There are no particular changes. The Railcar Section of PT. KAI performs railcar
maintenance. But as described below in (4) describing operation andmaintenance, due to insufficient capacity in the repair yard, heavy repairs andsecond rehabilitation is handled by being contracted out to PT. INKA (IndonesianRailway Industry). (* PT. INKA is a railcar manufacturing company, establishedwith full government ownership in 1981)(3) Financial status
A relatively stable budget has been secured for operation and maintenance ofthe project’s railcars, and no particular concerns have arisen regarding thefinancial aspect. The following table shows the PT. KAI profit and loss
situation. Before privatization, profitability would have worsened without
subsidies, and it would have recorded losses. However, after privatization,subsidies from the government fell below 60% of those the previous year, but anoperating profit was recorded. This is seen to be mostly a result of reduced(3) Financial status
Operating revenues are increasing, but an operating loss is recorded almost every
year. The unprofitable economy class comprises about 80% of passenger
numbers. Business class (16% of all passenger numbers) generates about 80% ofprofit, and the structure applies this profit towards costs of economy class. The
exact operation and maintenance budget amount is unclear. But according to PT.
KAI, it cannot perform sufficient maintenance with the current budget andgovernment subsidy, while economy class fares are regulated (low).As the budget

5

general and administrative expenses through streamlining of the business.
Profit/Loss Status(Unit: million rupiah)
1997

・Before←privatization
1998→Afterprivatization
1999

shortfall brings about undesirable effects such as lack of spare parts,improvement is required.
Table 2. Profit/Loss Status Unit: million rupiah
2004

2005

2,108,969

2,344,762

562,874
162,315n.a.
1,601
18,375

Operating revenues
Transport revenues:(1): passengers(2): freight
Incidental revenues
Other revenues
Government subsidy

1,495,680
563,227
39,795
10,268
163,968

1,586,969
700,665
41,24015,888270,000

969,476

745,165

Total revenues

2,272,937

2,614,762

557,128

787,244555,471

Operating expenses

1,719,892

2,097,496

200,731

182,233

189,693

Gross operating profit

553,045517,266
564,757

246,161

187,526-35,116-63,928

2,168

General andadministrative
expenses
Operating profit

559,954

235,847-6,909-47,491

Non-operating
incomeOrdinary income

65,486

101,777

28,497

Non-operating income

75,81770,28430,37037,84830,665

Ordinary income

68,90822,793Extraordinary income-1,869-8,712446

Pretax profit

28,501

29,137

31,111

Pretax profit

68,90822,793

Tax allowance

08,732

3,532

Tax allowance

23,995

17,288After tax profit

28,501

20,40427,579After tax profit

44,913

5,505

Operating revenues
Transport revenues:(1): passengers(2): freight
Incidental revenues
Other revenues
Government subsidy

726,359

937,976

725,189

498,981200,573
23,425
3,381
31,500671,560
217,453
40,4138,550
31,500Total revenues

757,859

Operating expenses
Gross operating profit
General andadministrative
expenses
Operating profit(4) Operation and maintenanceThe diesel railcars rehabilitated through the project implementation are
generally well maintained currently (at time of ex-post evaluation). A
maintenance plan is also formulated, and there are no problems with theoperation and maintenance situation. There are no particular problems with anyrailcars, and they are operating well.

Extraordinary income(4) Operation and maintenanceAs shown by the current number of operating railcars, the rehabilitated railcars
are progressively deteriorating due to the inadequate maintenance structure. The
following three issues can be raised in particular: (a) Quality of regular
maintenance, (b) Lack of spare parts, (c) Scale of the maintenance structure.
(a) On paper, periodic inspection and maintenance is performed almost according
to the manual, but opinions were given which pointed out its low quality.
(b) Spare parts stocks are incomplete, especially for consumable parts such asengine filters and seals. Thus continued use without replacement has become
normal. This promotes rapid deterioration and damage of power-producing parts6such as the engine. In addition to insufficient budgets, this is seen to be affectedby weak sense of the importance of preventative maintenance(c) The repair yard which performs heavy repairs and overhauls can repair 12
railcars per year, but diesel railcars require overhauls once every two years. Thisis a capacity to process 24 railcars, which handles only about one-third of therehabilitated railcars (24 out of a total 64 railcars). Thus the railcars operate
without receiving sufficient maintenance, and damage has progressed in somerailcars to the point where they require rehabilitation again. Still, the Ministry ofTransportation made a financial expenditure to contract PT. INKA (IndonesianRailway Industry) to once again rehabilitate 12 railcars in 2006, and 8 railcars in2006.
Lessons Learned,Recommendations,
Information
Resources andMonitoring Methods(1) Follow up on
lessons learned andrecommendations
made in the ex-post
evaluation report orin later evaluations(2) Proposals forsecuring
sustainability, andinstructions given attime of ex-postmonitoring

The operation and maintenance structure has both quality and capacity
problems. Thus it is necessary to strengthen the operation andmaintenance structure, and to enable this, also work to improve thefinancial structure.
(1)(2)
Nothing in particular(1) Lessons learned
None in particular(2) Recommendations(a) Insufficient quality and volume (scale) of the operation and maintenancestructure are the primary causes of decreasing results from the rehabilitation
project. The maintenance structure should be strengthened, especiallyreinforcement of the overhaul workshop and technical guidance for preventative
inspection operations.
(b) PT. KAI is forced to bear the cost burden of the unprofitable economy class,which is connected to issues such as insufficient spare parts. Operation of thesector with consideration for sustainability should be studied, such as
introduction of suitable fares.

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