The Indonesian government has decided to give state railway operator Kereta Api Indonesia (KAI) a 50-year concession for the future light rail transit (LRT) system in the new financing scheme, according to KAI finance director Didiek Hartantyo.
The government will also provide a subsidy for the operation of LRT for 12 years, which will be based on the deficit in the cash flow of the company, not the number of passengers.
The government decided that KAI would act as the investor for the facilities and infrastructure of the Rp 27.5 trillion (1.9 billion euros) project. To enable this, the Presidential Regulation No. 65/2016 must be revised, as it dictates that KAI is to be the sole investor.
KAI will receive a Rp 9 trillion (636.5 million euros) state capital injection, including Rp 2 trillion (141.4 million euros) from the 2015 state budget. The funds will be used as equity to get a Rp 18.5 trillion (1.3 billion euros) loan from state-owned banks.
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