Track access charge for Indonesian railways using full cost method: Improving industry competitiveness

Abstract

The government of Indonesia currently focuses on improving the public railway services to be more effective and efficient by formulating suitable railways infrastructure charges. This paper examines a possibility to determine the track access charge (TAC) for Indonesia railways infrastructure based on a benchmark to other countries. Compared to existing charge that used basic price and product factor, the alternative proposed concept also considers multiplicative surcharge and load component. In-depth interviews will be conducted with related stakeholders from government bodies, operator, and academics to gain more insights and further to validate the research outcomes. The result shows that the suitable TAC value for the railway's operator ranging from 56% to 66% from total proposed payable TAC, while government subsidy will cover the rest of 34% to 44% of determined track access charge to liberalize railways industry in Indonesia.