The official charged by the president to oversee putting an end to Jakarta’s traffic chaos said on Thursday he could not proceed with any of the potential solutions his unit had come up with because of a lack of coordination between ministries and sheer incompetence.
“We have been walking on the same spot,” said Kuntoro Mangkusubroto. “What’s happening now is the ones coordinating have no authority, while the ones with the authority are not willing to coordinate, and if we can’t solve this, we can’t fix this problem.”
The economic loss from poor traffic efficiency, with commuters often leaving at 5 a.m. to beat the rush, is around $1.5 billion annually and could rise to over $7 billion by 2020, according to the Jakarta Transportation Council.
Mangkusubroto, a respected technocrat, is charged with leading coordination and holding ministers in a fractious coalition to account, and his assessment does not bode well for a speedy overhaul of transport in Southeast Asia’s biggest economy.
President Susilo Bambang Yudhoyono has ordered officials to ease the traffic chaos in Jakarta by the end of his term in 2014 and resolve it by 2020.
The problems in the G20 member and a current investor darling mirror those of other rapidly developing nations, dealing with a surge in car ownership and growing urbanization.
Indonesia is expected to see record vehicle sales again this year yet few highways are being built, a 2010 government bill to speed up land acquisition is stalled in parliament and Jakarta’s first subway line is not expected until 2016.
Average morning rush hour vehicle speeds in the capital can be just 6.1 km (3.8 miles) per hour, slower than London or New Delhi’s of around 10 miles per hour.
Studies by the economy ministry show only 40 percent of car trips in Jakarta are used to actually move, perhaps no surprise to workers who face four-hour commutes when tropical downpours flood streets in the dense city of about 10 million people.
On paper, 17 solutions include a Singapore-style electronic road pricing system, limiting the age of vehicles to a maximum seven years, improving parking, integrating tickets for buses and trains and transporting goods at night, Mangkusubroto said.
But poor marks for performance in addressing traffic led him to cancel a recent meeting requested by the vice president who was keen to follow up on progress, Mangkusubroto said.
Jakarta’s governor last year mooted the possibility of issuing bonds to fund infrastructure improvements, and so it is possible authorities are waiting for ratings agencies to upgrade the country to a coveted investment grade sovereign rating before launching into the debt market at lower costs.
Fitch Ratings has said it could upgrade the G20 member in the next 15 months by a notch to investment grade, which would put Indonesia on a par with BRIC nations such as Brazil.
Yudhoyono is eager to play a major role in global diplomacy and is hosting the first World Economic Forum event to be held in the country this weekend. But major events and conference organizers often opt for Bali instead to avoid the capital.
Fitch has warned of the risk to its outlook from poor infrastructure, seen as a deterrent to attracting stable long-term foreign direct investment, so the country may be stuck in a chicken and egg situation. Indonesia wants private investors to fund two-thirds of $150 billion infrastructure needs.
Nomura said the state had under invested in infrastructure since the 1997 Asian crisis and recent spending versus GDP was less than half of China or Vietnam’s. The World Economic Forum’s competitive index rates Indonesia 82nd for infrastructure.
Despite the lack of progress connecting a scattered archipelago of 17,000 islands stretching from the Indian to the Pacific Oceans, investors remain hopeful as they eye selling products to the world’s fourth largest population.
Investment interest from foreign automakers, consumer goods firms and Asian manufacturers such as Toyota , Nestle and South Korea’s Lotte Group has surged this year.
“I think it’s not a question of whether the infrastructure projects will develop on time or not, but the comfort that we’re moving in the right direction,” Wilianto Ie, head of research at Nomura in Jakarta, told Reuters.
