May 15, 2024
JAKARTA – Japanese companies are looking to invest in transit-oriented development (TOD) hubs around key MRT Jakarta stations, according to a senior official at the Japanese Embassy in Jakarta.
Speaking to The Jakarta Post on Monday, the Japanese embassy’s minister for economic affairs in Jakarta, Hajime Ueda, said several private firms across various sectors were actively exploring investment opportunities in these TOD hubs, areas within a 700-meter radius from the commuting points akin to models used in Japan.
These hubs are around the Bundaran HI, Dukuh Atas and Lebak Bulus stations. The Jakarta administration wrote in April 2023 that these TODs would also include affordable housing along with retail centers.
“Japanese companies are viewing the opportunity positively. There are a couple of individual companies who are already engaged in making business plans and finance schemes with their Indonesian counterparts,” he said, without disclosing the companies’ names.
This collaboration comes on the heels of a visit by Transportation Minister Budi Karya Sumadi to Tokyo on April 25.
During his trip, he presented six investment projects accepting bids: a mixed-use complex development at Blok M, a pedestrian deck at Dukuh Atas, the revitalization of Sudirman Station, extended concourses at Bundaran HI and Fatmawati and a reservoir revitalization project at Setiabudi.
The MRT has become one of the most important transportation networks in Jakarta since the first phase of the North-South line opened in 2019 with the help of the Japanese government.
Japan had also been pushing to start construction of the East-West line, a planned cross-shaped route, since last year.
Conducted in multi-phases, the first phase would initially connect a 33-kilometer line between Tomang in West Jakarta and Medan Satria in East Jakarta, before eventually stretching 90 km to Balaraja in Banten, and Cikarang in West Java, upon its completion in 2032.
The first phase would be split into two stages. The first covers a 24.5 km line with construction to begin by mid-2024, following the note exchange on a yen-denominated loan conducted on Monday involving the Japan International Cooperation Agency (JICA).
The 140.69 billion yen (US$903.4 million) loan boasts an interest rate of 0.3 percent and a 40-year repayment period that includes a 10-year grace period.
Read also: Construction delay, affordability issue jeopardize TOD pickup
The agreement also falls under the Special Terms for Economic Partnership (STEP) program, meaning that Japanese firms would be directly involved in the project’s construction, facilitating technology transfer to its local partners.
The technology transfer would focus on areas such as underground tunnel construction, train technology and signaling systems.
Read also: MRT Jakarta mulls extending rail line to South Tangerang
Currently, both Indonesia and Japan are working on the North-South line’s second phase in Jakarta, extending it to the north from the existing 16 km between Lebak Bulus and Bundaran HI to a total of 28 km ending in Kota.
“With the participation of Japanese companies and efforts from the Japanese government, commuters using the MRT can benefit from the convenient lifestyle,” Minister Ueda said.
“We’re committed to support Indonesia’s efforts to make Jakarta safer and more comfortable,” he added.
Experts viewed that the sustainability of transit-oriented development projects would require more than just strategic locations.
Indonesian Transportation Society (MTI) railway forum head Aditya Dwi Laksana told the Post on Monday that the success of the TODs would hinge on the affordability of housing projects provided as well as a developed culture of living in vertical housing.
“It must integrate office, commercial and residential spaces while ensuring it is walkable and easy to access,” Aditya said, reflecting on existing TOD hubs built in other parts of the city.
Jakarta has previously built TOD hubs for other transportation modes, such as train, bus and mikrolet (minibus) as well as the commuter line (KRL), such as those located in Pasar Senen and Pondok Cina.
The construction of these past projects hinged on one aspect, instead of having everything integrated, which risked causing the opposite of the desired outcome, he said.
Cushman & Wakefield strategic director Arief Rahardjo said on Monday it would be important to consider the development’s configuration, collaboration schemes as well as investment timelines and integrated connectivity.
“Mixed-use developments within TODs will only be successful in terms of sales or leases if their public transportation corridors are well-connected to all corners of the city, as seen in Singapore or Japan,” Arief said.