pre-feasibility study in urban transport, yogyakarta...
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Pre-Feasibility Study in Urban Transport, Yogyakarta, Indonesia
July 2011 Executive Summary Prepared by GlobalWorks
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A. Introduction 1. The Cities Development Initiative for Asia (CDIA) and the Asian Development Bank (ADB) appointed GlobalWorks to complete an urban transport pre-feasibility study (PFS) for Yogyakarta and its surrounding urban area. Bridging the gap between Government‟s existing transport plans, and developing realistic urban transport investments, the objectives of the PFS are to;
1.1. Develop a comprehensive urban transport sector strategy for Yogyakarta, and recommend necessary policy and regulatory framework improvements to allow strategy implementation. The purpose of this strategy is to help Yogyakarta‟s Government to form a long-term vision for sustainable urban transport development, which will in turn support Yogyakarta‟s economic development and social wellbeing.
1.2. Identify priority, „bankable‟ urban transport investments that either have
minimal environmental impact, or actually mitigate climate change and contribute to improved environmental conditions. The purpose of this is to commence the process of quantitative improvements in the urban transport sector by moving from a „wish list‟ to a „do list‟.
1.3. Strengthen the capacity of key institutions involved in the management and
service delivery of the urban transport sector, including local and provincial level agencies as applicable. The purpose of this is to ensure that the proposed benefits of the investments are realized.
2. The PFS, undertaken between November 2010 and June 2011, formulated a sustainable urban transport sector strategy and high priority investment package for the greater Yogyakarta urban area in DIY Province. It is the direct result of a detailed, collaborative effort between the Provincial and City Governments, CDIA, ADB and its Consultants, the Sustainable Urban Transport Improvement Project (SUTIP), and a wide range of Government and other community based stakeholders. 3. Both the Provincial and City Governments have subsequently expressed a strong commitment to implement the urban transport strategy and deliver the recommended transport infrastructure improvements. This will dramatically improve the city‟s urban transport modes, and contribute significantly to Yogyakarta‟s attractiveness and urban amenity. As such, this initiative reflects fully the needs and desires of a wide range of stakeholders. B. Project Area 4. The city of Yogyakarta is the main urban area in the Yogyakarta Special Region of DIY Province. Renowned as a hub for classical Javanese art and culture, it is the nation‟s second-most important tourist destination after Bali. Yogyakarta is also an important catalyst for higher education and learning, being the home of the prestigious Gadjah Mada University and a number of well-known private universities. 5. Being relatively small in geographic area (32.5 km²), the Kraton (Sultan's palace) is at the city‟s core, surrounded by dense residential neighborhoods. The project area of the PFS, known locally as „KARTAMANUTL‟, includes Yogyakarta City and the outer urban areas which expand into the contiguous regencies of Sleman and Bantul (Figure ES1).
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Figure ES1: Project Area
C. Urban Growth 6. Yogyakarta has outgrown its administrative boundaries, spreading into the neighboring regencies of Sleman to the north and Bantul to the south. The resulting urban footprint is home to nearly one-million residents1, or about forty percent of the total provincial population (Figure ES2).
Figure ES2: Population Forecasts
7. Yogyakarta also has a relatively high transient population, primarily due to its high concentration of universities and the flourishing tourism sector. The result of ongoing urbanization and population growth within the city‟s limited geographical area is driving the urban footprint expansion beyond the city‟s boundaries. Figure ES3 highlights this, showing how the population is expanding outwards from the city, a trend that is expected to continue into the future. From a transport perspective, this situation highlights the classic hallmarks of increased number and distance of commuter trips, and the inevitable congestion of urban arterials within the city.
1 The urban footprint includes all of the Kabupaten of Yogyakarta and those portions of Sleman and Bantul Kabupatens which
contain urban populations. That is, not all of Sleman and Bantul Kabupatens are within the urban footprint.
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ES3: Urban Growth
D. Transport and Traffic 8. Yogyakarta has a well-defined road network, being bounded by a four-lane (dual-carriageway) ring road, complete with frontage roads and two-wheel/four-wheel vehicle separation (Figure ES4). Within the ring road, the road network forms a rectangular grid pattern, and a number of one-way streets exist within the city center. Although these roads are in a reasonable state of repair, they are generally narrow and lack of footpaths. Where footpaths do exist, they are often clogged with informal sector activities, blocking rights-of-way. The city is also served by a range of motorized and non-motorized public transport services, which provide services to local and regional destinations. In the city, these include 74 TransJogja buses, 431 authorized „bus kota‟ buses, 348 „andongs‟ (traditional horse-drawn carriages) and 8,200 „becaks‟ (cycle rickshaws). 9. As with other similar Asian cities, Yogyakarta is experiencing an explosive growth in private vehicle ownership, with motorcycle and car ownership levels rising by 10.9% and 7.7% per annum respectively. While formal estimates are lacking, the current mode share of urban bus services is considered to be less than 10% and falling, primarily the result of a dichotomy of falling bus standards and rising private vehicle ownership levels. 10. This is creating the all-too-familiar challenges for the existing road system, as key inner-city arterials become increasingly congested, with recorded volume-to-capacity (VCR) exceeding one in many cases.
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Figure ES4: Primary Traffic Corridors ratios
11. The time has arrived for immediate intervention and action in order to improve the capacity of existing corridors to cope with the increasing transport demands of the area generally. Such an action depends heavily on refinements to the recently-developed and innovative TransJogja bus system, paving the way for improvements to Yogyakarta‟s rapidly congesting urban environment. E. TransJogja 12. Originally conceived in 2004 as a 120-bus operation, the TransJogja system was developed as an innovative response to the worsening traffic conditions, falling passenger levels and viability of the then urban bus system (bus kota). Introduced in February 2008, this system now operates four routes with a fleet of 74 buses. Figure ES5 shows key components of the system and demonstrates the capacity of the local Government to introduce such an innovation into the transport sector.
Figure ES5: TransJogja Modern System Elements
13. TransJogja currently has an overall cost recovery however of only 30%. This is despite an average 40% load factor, and reflects in part an overstaffing constraint on the system. The principal reason for this high level of staffing is the number of staff allocated to each shelter (7 per shelter) for ticket sales and system monitoring purposes. In addition,
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inadequate shelter coverage, poor route design, and a continuing duplication by bus kota operations are factors contributing to this overall situation. F. Long Term Strategy 14. The primary recommendation of this PFS and its long-term strategy is to redevelop and improve the TransJogja bus network as a foundation for a sustainable urban transport outcome for the Yogyakarta urban area into the future. In support of this, the overall transport sector priority is to ensure that the seven primary transport corridors of the urban area function in a way that permits TransJogja to fulfil its intended objectives and achieve its full network; a potential which has been outlined previously in the Government‟s Grand Plan and is supported by this PFS (Figure ES6). 15. It is envisaged that corridor improvements be staged in order for TransJogja to accommodate an increasing network (Figure ES7). The three highest priority corridors are to be developed in the first phase (2011-15); the second highest priority in the second phase (2015-20); and the third highest priority corridors after that in the third phase (2020-22). The total cost of these phases is between USD$ 135 million and US$ 150 Million. This includes US$ 62.8 million for Phase 1, US$ 45-US$ 62 million for Phase 2, and approximately US$ 26 million for Phase 3. Together, these three phases form the basis by which the long-term strategy for the urban transport sector, as defined by this PFS, can be achieved. 16. This overall strategy reflects the combined ambitions of both the Provincial Government and a wide range of key stakeholders consulted during the PFS process. It is considered to be a practical and achievable strategy based on the technical analysis undertaken during the study. It also reflects a strategy that is considered to be within the reach of the limited capacity (with modest improvements) of those Government agencies responsible for the sector.
Figure ES6: Future TransJogja Network
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Figure ES7: Investment Priority Corridors
17. The highest priority investments (2011-15) form the investment package recommended in this PFS. They include upgrades for three east-west corridors in order to provide enhanced operation conditions for TransJogja. These are referred to as;
17.1. Corridor 1 (Prambanan to Ngabean, via Jl Sudirman), 19.1 km distance,
17.2. Corridor 2 (Janti Flyover to Ngabean, via Jl Sultan Agung), 11.2 km distance,
and
17.3. Corridor 3 (Giwangan to Ngabean via Kota Gede, Jl Kol Sugiono), 10.9 km distance.
18. As sections of these corridors overlap, the total length of roadway involved is 39.6 km. These corridors, along with the specific locations of the investment components, are presented in Figures ES8, ES8a, ES9 and ES10 on the following pages. F. Prioritized Investment Program 19. The prioritized investment program is the result of a logical process of reviewing the City‟s policies and plans, supplementing this with technical analysis where required, and implementing a consensus-driven program selection process involving a broad range of
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stakeholders in a public workshop setting. The key outcomes of this process are the selection of the three corridors, with a range of investment components as follows;
19.1. Terminal Upgrades: The Prambanan terminal is proposed as an „anchor‟ for the eastern end of Corridor 1. To the west, an upgrade of the old and disused Ngabean train station is proposed, as the anchor for the three corridors. These are shown in Figure ES8 and are considered an essential component in raising the profile of the TransJogja network, improving operations, and providing improved conditions for passengers at these two key network interchange locations. 19.2. Priority Lanes and Clearways: In each of the three corridors, it is proposed to clear the majority of the kerb lane of the current on-street parking so that the TransJogja fleet is able to operate more efficiently, resulting in a more reliable service schedule. This is fundamental to the task of improving the competitiveness of the public transport mode compared with private transport modes, thereby increasing the mode share of the former. The sections earmarked for priority lanes and clearways are illustrated in Figures ES8, ES8a, ES9 and ES10. Over time, and in accordance with a demonstrated need, extensions of these priority treatments can be made to encompass the entire length of the three corridors. 19.3. Additional Passenger Shelters and Footpath Improvements: In addition to the combined effect of the current high-floor shelter design and inadequate footpath conditions, there is a lack of passenger shelters on the network. Where they do exist, pedestrian access conditions are often inadequate for the purpose of encouraging their continued use or growth in passenger demand. This has the effect of making the TransJogja system largely inaccessible to many poor communities adjoining the three corridors. Passenger demand has been suppressed as a result of this and the financial performance of the system has suffered as a result. In the interest of improved market share by TransJogja, it is imperative that firstly, additional shelters (in accordance with agreed modified designs) be provided; and that secondly, where possible, improved pedestrian conditions be provided within a nominated distance (up to 100 metres) of each bus shelter.
19.4. Intelligent Transport Systems (ITS): As an integral part of the upgrading and modernization of the sector‟s management systems, the following components have also been included in the investment project;
19.4.1. Automatic Traffic Control System (ATCS): This comprises a number of intersection signals with the capacity for real-time monitoring and flexible cycle times to respond to the needs of the TransJogja system. To be installed at a number of key intersections on each corridor, the signals will enhance the effectiveness of the priority lane treatments to provide travel time benefits for the growing TransJogja passenger base. 19.4.2. Central Control Room (CCR): This facility will assist Government to monitor and manage the operations of TransJogja and of traffic in the corridors on a real-time basis. In accordance with accepted international practices, these facilities are being recognized as a necessity for effective traffic management. The focus of this facility will be on improved management and compliance monitoring of conditions in the three corridors that are included in this first phase improvement program. 19.4.3. GPS-Based Fleet: Essential to the efficient management of service provision and planning is the ability to recognize and respond to emerging
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congestion sections on the network. GPS technology has this proven ability. As such, all TransJogja buses will be fitted with GPS to enable effective tracking for both management planning purposes and to provide passenger advice on bus arrivals and delays (via RTPI). 19.4.4. Real-Time Passenger Information System (RTPI): It is universally recognized that passengers who are not kept informed of bus arrivals soon become impatient, lose confidence in the system and travel by other means. This results in a loss of market share, falling revenues and a reduced ability to justify further expenditure to rectify the situation. RTPI is an element of service which is becoming an accepted standard within urban transport systems across the world. For these reasons, RTPI is a system feature which is deemed to be required as part of the ongoing modernization of the TransJogja system. 19.4.5. On-Board Ticketing: The current shelter-based ticketing system is costly from a staffing perspective. Furthermore, with ticketing being restricted to a shelter design that is largely inconsistent with the capacity of Yogyakarta‟s footpaths, this presents a further restriction on community access to the network. An on-bus ticketing system will therefore greatly reduce these constraints, and is included in the investment project.
19.5. Fleet Maintenance Depot: As part of the long-term strategy to maximize fleet life and improve PT Jogja Tugu Trans maintenance capabilities, a new fleet depot is proposed. The depot is to be located to the south in the Bantul Regency, and on vacant Government owned land adjacent to Pasar Niten (community market). 19.6. Off-Street Parking: A number of commercially-based off street parking and park and ride sites will be developed along each corridor to enable the transition from on-street to off-street parking. The locations of these sites are shown in Figures ES8 – ES10. Where sites are currently used for parking (but are generally underutilized) they are indicated as „existing”. A park and ride facility will also be developed as part of the investment in the renewal of the (Government-owned) Prambanan traditional market site. On Corridor 2, the vacant western section of the Jogyakarta Exhibition Centre, which is also Government owned, will be developed as a dedicated park and ride site with a complementary upgrading of the kerbside stop and a pedestrian overbridge for added passenger convenience and safety for the return journey. Combined with increased regulatory compliance in relation to the management of corridor car parking, this component of the investment project will provide a „release valve‟ to enable the kerb side clearways and bus lanes to work. 19.7. Additional Buses: Additional buses are required in order to improve service levels, accommodate the demands of the growing TransJogja network, and replace the old bus kota fleet as it is phased out. For this initial phase, up to 60 new buses will be required to provide a five-minute headway on the corridors, and to accommodate the growth in demand anticipated. These 60 buses are to be based on current fleet specifications
20. The proposed investments will pave the way towards an enhanced TransJogja network, where mode share levels are able to rise consistently to deliver a sustainable outcome for the residents and businesses of the city. This is especially the case for the urban poor who rely heavily on the system for mobility. An improved network will also reduce traffic congestion, improve environmental conditions through reduction in atmospheric emissions, and enhance the city‟s overall efficiency and economic competitiveness. It will
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Figure ES8a: Corridor 1 Project Components (cont)
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also improve the capacity of Government to plan, develop and implement infrastructure projects of this nature, including future corridors of the TransJogja network. G. Stakeholder Consultations 21. Extensive stakeholder consultations have been undertaken throughout the entire PFS process. These have included a community based household survey, regular working group meetings with key Government agencies, two public stakeholder workshops, and weekly working group sessions with the Department of Transport during the final month of PFS formulation. Together, these have all provided input and refinement to various elements of the investment components. Furthermore, detailed discussions have been held with key staff advisers to the Governor of the Province. All have expressed support for the project, the priorities, and the recommended investment components. Accordingly, there is a broad level of local support and willingness to see these improvements become a reality. H. Finance and Economics Capital Costs 22. The total capital cost of the investment package is estimated to be IDR 546.2 billion or US$ 62.8 million equivalent (May 2011). This includes (i) the preparatory phase of the full feasibility assessment, (ii) detailed design and construction supervision, (iii) project construction, (iv) the procurement and installation of all the ATCS, GPS and RTPI equipment, (v) the CCR screens and video backup/computer equipment and data communication lines, (vi) provision for extensive community consultation, and (vii) capacity development required to ensure the project is delivered as intended. The package is tentatively grouped into three bundles.
22.1. Bundle 1 is predominantly public infrastructure (bus lanes, clearways, passenger shelters and footpath upgrading), and supporting technologies that are considered essential but have no direct revenue stream capacity. This bundle also includes the park and ride components of the publicly owned Prambanan market redevelopment; the extension of the publicly owned JEC parking facilities; and the development of the bus maintenance depot adjacent to publicly owned Pasar Niten (community markets) as part of the Corridor 3 investment component. The estimated capital cost of this bundle including the value of the land is US$ 36.2 million. The project components are listed in Figure ES 11 on the next page. 22.2. Bundle 2 comprises the off street parking elements, where private sector interests already own many of the vacant sites and can potentially establish businesses based on the cash flow generated by the transition of on-street parking to these off-street sites. The estimated capital cost of this bundle including the value of the land is US$ 21.3 million. The sites are shown in Figures ES 8, 9 and 10, and the project components are summarized in Figure ES12.
Figure ES12: Bundle 2 Components and Cost Estimates
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Figure ES11: Bundle 1 Components and Cost Estimates
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22.3. Bundle 3 is the continuation of fleet acquisition by PT Jogja Tugu Trans as the staged replacement of the privately-funded bus kota fleet continues. The capital cost of this (based on recent fleet acquisition costs) is US$ 5.3 million. The additional fleet required to build to a five-minute headway by the end of the first phase (2015) is shown in Figure ES13:
Figure ES13: Bundle 3 Additional Fleet Requirements
23. The above outline costs (for all bundles) include the provision of detailed feasibility and engineering design, the relevant community consultation required during detailed design and implementation, and applicable government taxes. I. Economic and Financial Analysis 24. Bundle 1 mostly consists of infrastructure and equipment components, which have no direct revenue stream. These projects deliver infrastructure required for improved bus and traffic operation with broad benefits to the community, and would require financing predominantly by Government or international loan/grant sources. The exceptions are the Prambanan terminal, the JEC Park & Ride facilities, and the fleet maintenance facility; where there may be opportunities for private sector financing. A preliminary economic evaluation was conducted in general accordance with ADB Guidelines to test the overall economic return to the community. If the cost of land required for off-street parking is not included in the project cost then the results of the economic evaluation are:
24.1. Corridor 1 has a BCR of 1.78 with a NPV of US$3.38 million (IDR 24,074.45 million) and an EIRR of 59.1%.
24.2. Corridor 2 has a BCR of 1.32 with a NPV of USD $0.59 million (IDR 5,128.65
million) and an EIRR of 30.4%.
24.3. Corridor 3 has a BCR of 1.7 with a NPV of US$ 1.80 (IDR 15,631.07 million) and an EIRR of 45.6%.
25. This indicates that the Bundle 1 investments in on-street infrastructure measures to improve bus operation and reduce travel times deliver overall benefits to the community that significantly exceed the investment cost. Sensitivity tests show that the investments in corridor infrastructure are still economically viable if the capital costs increases by 20%, but are sensitive to reduced user benefits if expected reductions in travel time are not achieved. This underscores the importance of achieving the travel time savings targeted through compliance with the new conditions of clearways and bus lanes and adequate ongoing enforcement. 26. When the cost of land required for off-street parking facilities along each corridor is also included in the project cost, the overall investment is no longer economically viable, However there is potential for commercial operation of the car parking by the private sector with the cost offset by parking charges. Accordingly the development of parking along each
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corridor has been split off as separate project components. These off-street parking components comprise Bundle 2. 27. Bundles 2 and 3 comprise components (off-street parking and purchase of additional buses) which are revenue generating and suitable for commercial operation by the private sector. A preliminary financial assessment has been conducted for these Bundles. For Bundle 2, the results of the evaluation show a financial internal rate of return (FIRR) of 46.3% with a NPV of USD$ 2.58 million (IDR 21,786.49 million). This is on the basis of a 70%:30% debt to equity ratio. On this basis and at current parking charges, the debt payback period is 2 years. Sensitivity analysis shows that with a 30% increase in cost, the IRR remains attractive at 37% and requires a debt payback period of 3 years. This indicates that the off-street parking component is a low risk sustainable commercial investment with strong potential for private sector operation. 28. For Bundle 3, the current Government contract payment of IDR 5,028.92 per km of service is already a viable business transaction for PT Jogja Tugu Trans. This bundle represents a continuation of this arrangement, and has therefore not been subject to any additional financial assessment to gauge its attractiveness as an investment. J. Investment Sources 29. The PFS has highlighted a shortcoming in the ability of the Provincial and Local Government to fund the entire investment project from local revenue sources. It is apparent that additional external funding assistance in the form of loans or grants will be required. As is common practice in Indonesia, two sources of external financing assistance are available for Local Governments.
1. A traditional approach where Local Government resources are supplemented by National Government in the form of a loan or grant. This can take the form of a Specific Block Grant (DAK) or a Special Allocation Funds (APBN) mechanism.
2. A second approach, which would draw upon the resources of a range of stakeholders including the private sector in a public-private-partnership (PPP) arrangement; and/or international sources, either by loan or grant mechanisms. In the case of the latter, the ADB, European Investment Bank or other international development partner may provide a mix of grant and loan facilities for program investments based on the investment being able to satisfy specific eligibility criteria2.
30. In the case of the former approach, the extent of funding for the investment project as a whole apparently cannot be guaranteed at this time. Also, the timing of any interim funding allocation is likely to be subject to lengthy budgetary processes. 31. In the case of the latter approach, the Provincial Government could establish a dedicated unit within its structure to source additional funds and manage project implementation. This would include implementation of the project components, financial cash flow aspects and debt servicing in accordance with the requirements and guarantees required by those stakeholders providing funds for the investment project. The structure and position of this unit within the machinery of Government has been discussed and agreed with senior officers of the Provincial Government. The structure is described later.
2 Including for example, Global Environment Fund Global Environmental Facility (GEF), Clean Technology Fund (CTF), IDB
Sustainable Energy and Climate Change Initiative (SECCI), ADB Climate Change Fund (CCF), and ADB Clean Energy Fund
(CEF).
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K. Implementation and Project Financing 32. 33. To assist with the task of program financing, Figure ES14 outlines the proposed implementation schedule for the investment package. It proposes full feasibility assessment being scheduled for 2012, followed by construction commencing in early 2013. All components are scheduled to be operational in early 2015, with the exception of the Prambanan terminal and park & ride site, which (due to the scope of works involved) are scheduled to be operational in early 2016. Figure ES 15 provides guidance on the bundles from project viability and potential financiers perspectives. This advice is supported by a one-page summary in support of each of the bundles. Figure ES14: Proposed Implementation Schedule
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Figure ES 15: Program Economic/Financial Viability and Potential Sources of Financing
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L. Institutional Arrangements 34. Government has confirmed that the PFS transport strategy is to be formally adopted and ultilized as a reference for Provincial Government policy for the transport sector. The task now for the Provincial Government is to deliver the investment project. As discussed earlier, an effective way to address this is to establish a specific unit within the machinery of Government to be responsible for the success of the project. For convenience, such a unit has been referenced in this PFS simply as a Project Implementation Unit (PIU)3. Such a unit can be established within the Government structure which would receive specific capacity development capabilities to ensure the delivery according to the supporting decrees of the Governor. 35. Complementing and supporting the role of the PIU would be relevant departments (including DISHUB, BAPPEDA, PU and POLDA), which would provide direct assistance with timely decisions, supporting budgets, and the ongoing management of the corridors as per the requirements of the project. Naturally, all of these actions would be within the scope of the Decree by the Governor, which requires these to be implemented within a nominated time frame, and provides the ongoing authority to do so. Then by using the successes (or failures) of the actions of the PIU, Government can learn from the experience when progressing through project development and implementation, and when preparing to implement Phase 2 (medium term) and Phase 3 (long term) of the strategy. 36. Discussions with senior personnel within both the Office of the Governor and DISHUB have led to a commitment to form a PIU. This unit would ideally have the ability to borrow (within the guidelines of standard Government procedures), and to implement and be accountable for the delivery of the investment program for the short, medium and long term phases. A structure has also been agreed in principle at the Office of the Governor level and is shown in Figure ES16. This has yet to be presented to the Governor for ratification. 37. In anticipation of such ratification being granted, a draft list of contents for the relevant Governor‟s Decree has been drafted and agreed to by senior officials from both the Office of the Governor and DISHUB Province. This list is shown in Figure ES17 and provides a sound basis for moving forward on the entire project. It also highlights the relatively advanced stage of the strategy and investment project with the Provincial Government. Both CDIA and SUTIP are following up on this matter.
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