Operation Maintenance Contract Scheme in Railway Infrastructure Project

Abstract

Railway plays a significant role in improving connectivity and generates economic growth of a nation. The contract in railway has been discussed to improve industry railway competitiveness in the past decades not only in developed countries but also developing countries such as Indonesia. The country attempt to build railway tracks across the country, but the contract for operation and maintenance remain a question. The paper attempts to support the mechanism of operation and maintenance contract and use railway project in the country as the case study. The research uses a combination of qualitative and quantitative approaches through the in-depth interview and questionnaire survey. It distributed to key stakeholders related to railway and infrastructure project consist of a government institution, private investor, a state-owned enterprise, and local-owned enterprise. The result shows that performance-based contract is the most suitable for the railway industry. It shall consider duration and the contract value to select the best contract. The project prefers to be managed by private investors or local-owned enterprise. Business entity selection shall consider their company reputation, licensing requirement, and healthy financial structure.