Altha: Achieving a connected and efficient transportation system in Indonesia

Indonesia is undergoing rapid urbanisation and economic growth, placing unprecedented demands on its transportation system. Experts from Altha examine the challenges and opportunities in creating an integrated, efficient, and future-ready connectivity network across the archipelago.

Indonesia is with 282 million people the fourth most populous country in the world and is experiencing population growth at an annual rate of approximately 1.11%. Population growth, along with other factors, is driving increased demand for transport across land, sea, and air.

Transportation connectivity however has always been and remains a dilemma for Indonesia. As an archipelagic nation of more than 17,000 islands, geographical disparity is inevitable; economic activity is heavily concentrated in Java, while resource production, manufacturing growth, and consumption are dispersed across Sumatra, Kalimantan, Sulawesi, and Eastern Indonesia, which highlight the importance of transportation connectivity on the nation’s economy.

The Jakarta example
Illustrating the dilemma: even Jakarta, the nation’s capital and economic heart, has yet to achieve a level of multimodal connectivity that satisfies its residents. Despite being the epicenter of infrastructure investment, introducing modern rail systems like mass rapid transit (MRT) and Light Rail Transit (LRT), the first mile and last-mile connectivity remain a significant hurdle to overcome for people and businesses in the capital city.

Furthermore, the sheer volume of private vehicle ownership presents a staggering obstacle. With approximately 20.2 million units, the number of private vehicles in Jakarta is nearly double the city’s population. The high preference to possess private automobiles ownership/utilization is also reflected through increase rate within motorcycles (4.9%) and cars (7.0%), which is higher Jakarta’s population growth rate (1.1%).

Meanwhile, Jakarta consistently ranks among the world’s most congested cities, resulting in billions of rupiah in lost productivity and wasted fuel annually.

Upgrading Indonesia’s urban transportation connectivity

Given these multifaceted challenges, it is evident that Indonesia must urgently prioritize the improvement of its urban transportation connectivity. However, this necessity raises several critical questions:

• What does ideal connectivity entail, and what specific benefits does it provide?
• What is the bottleneck for Indonesia to achieve transportation connectivity?
• What strategic actions can be taken to enhance and sustain this connectivity moving forward?

What is ‘ideal connectivity’?

Ideal connectivity in an urban or national context refers to more than just the presence of transportation infrastructure. It is defined as a seamless, multimodal, and integrated network where various modes of transport including rail, road, air, and sea function as a single synchronized ecosystem.

Additionally, the ideal transportation connectivity should improve the citizen’s productivity and its quality of life, providing inclusive access to opportunities from jobs, education, and even healthcare.

1) Component of Ideal Connectivity

In these cases, the concept of ideal connectivity in transportation itself encompasses three different component that bridge the gap between physical infrastructure and human movements:

Efficient Multimodal Integration
The synchronization of different transport modes. In the context of Indonesia’s transportation system itself, it implies that every transportation mode, ranging from MRT, LRT, bus rapid transit (BRT), airport train, and many other transportation modes is fully integrated within larger circulation network. This includes “unified ticketing” (paying for a bus, train, and bike-share with one card) and physical hubs where transfers are instantaneous.

The First-Mile and Last-Mile Solution
Addressing the beginning and end of a journey. Ideal connectivity ensures that a passenger can reach a transit hub from their home safely via walking, cycling, or micro-mobility. This is being done by implementing well- maintained sidewalks, dedicated cycling lanes, and micro-mobility options such as electric scooters or feeder buses.

Implementing a sufficient first mile and last-mile gap, the system eliminates the dependency on private vehicles for short-distance access, which is the primary driver of traffic and congestion in Indonesia cities.

Transit-Oriented Development
The strategic design of high-density residential and commercial spaces within a 5-to-10-minute walk of major transit nodes. By co-locating housing and workplaces with high-capacity transportation mode, Transit-Oriented Development inclusion could significantly reduce average trip lengths and ease Indonesia’s citizen regarding the access of public transportation, possibly lowering the necessity for private vehicle ownership.

All of these components are deemed as an important aspect to achieve an ideal transportation connectivity, particularly for Indonesia’s citizen.

2) Benchmark of Ideal Connectivity

For Indonesia to achieve optimal transportation connectivity, it can draw lessons from best practices observed in other countries, such as Singapore and Tokyo.

Singapore: The 45-minute City & 20-minute towns
Singapore, as an advanced city-state, has placed public transport at the core of its urban development. This is evident in its highly integrated bus and subway (MRT) networks, which provide comprehensive coverage across the country. The primary objectives of this system are to maximize reliability and seamless connectivity for all residents.

A premier example of this integrated approach is seen in Changi Airport. Changi serves as a global multimodal hub, hosting over 900 weekly cargo flights and maintaining high-speed links to world-class seaports.

The airport achieves a high degree of synergy between different transportation modes. This integration encompasses both passenger movement and baggage logistics, which are the core components of aviation transport, thus ensuring that the transition between air, land, and sea is instantaneous and efficient.

Improvement on Singapore’s public transport is largely attributed to its long-term strategic visions which is shown inside the Land Transport Master Plan (LTMP) 2040, aimed to elevate Singapore’s transportation experience to become a “45-minute city” and “20-minute town” concept. By integrating advanced technology, robust infrastructure, and the needs of its residents, Singapore has created a benchmark for seamless urban connectivity.

Tokyo, Japan: The Rail-Integrated Community
Japan, as a country that preserve tradition, has limited the utilization of private vehicles and encourage public transportation as its journey’s option. Tokyo, as its capital city, boasts one of the most heavily used integrated rail networks globally, providing frequent, all-day service to the central city and within the suburbs, resulting in 71% of commuters in Tokyo Metropolis Area taking public transportation as its primary transportation.

The success of this model is largely attributed to the concept of Rail- Integrated Communities (RIC). Unlike traditional transit hubs, RICs are designed as high-density, mixed-use developments that serve as vibrant community centers. These hubs are meticulously planned to be pedestrian- friendly, ensuring they are easily accessible by foot, bicycle, or local feeder transit.

Furthermore, the shift away from automobiles is reinforced by strict government regulations. For instance, car owners must provide a “garage certificate” or shako shomeisho to prove they own or lease a dedicated parking space before they are permitted to purchase a vehicle. These controls, necessitated by Japan’s limited land mass and a lack of domestic oil reserves, have successfully transformed automobile ownership into a lifestyle choice rather than an urban necessity.

3) Benefit of Ideal Connectivity

According to research, ideal connectivity provides a “dividend” that far exceeds the cost of construction. Benefits include:

GDP Growth
Transportation connectivity could create economic growth due to its association with reduction in travel time. It is found that with 10% decrease in average travel time due to investment in transportation sector, it would result into 0.44% improvement in country-level gross domestic product.

The positive effect itself emerges because investment in transportation connectivity promote closer economic integration and more efficient allocation of labour.

Household Economy
Investment in transportation connectivity also have positive economic impact on individual level. In this case, it is found that 10% decrease in average travel time is associated with an increase of 3.9% income, particularly in the larger cities.

By reducing the time and cost required to reach workplaces, connectivity increases the "disposable time" and earning potential of the workforce.

Social Equity
Ideal connectivity could improve employment opportunities of people inside of the city. After all, for lower-income residents, an integrated transportation network ensures that geography or location is no longer a barrier to opportunity.

One of the examples is shown through light rail investment in 12 districts in United States, which result into 39% improvement in labour market participation within 0.5 miles from the station. It allows outskirt citizens to access the same job markets, specialized education, and healthcare facilities as those living in affluent city centers, thereby fostering social mobility and reducing regional inequality.

Bottlenecks in advancing transportation connectivity

So, what are the bottlenecks holding Indonesia back from advancing its transportation connectivity? Three key factors stand out:

Public and Passenger Side
In Indonesia, public transport is still perceived as a secondary option for urban mobility, which is shown from commuter statistics by BPS where 79% of Indonesia’s commuters preferred to use private vehicles, a figure that is wholly different from the data trend of Japan (around 80% use public transportation) or any other countries that has advanced public transportation.

The low interest of Indonesia’s resident on public transportation largely stems from several different factors. The main critics is mainly because current public transportation is deemed impractical and failed to satisfy both travel demand and travel experience, which presents multiple mode transfers, inadequate routes/corridors, and unreliable schedules.

Secondly, there are complaints regarding the lengthy walking distance to go into the official transportation-hub, which takes individual’s energy and time. Finally, travel time are considered ineffective by commuters due to mixed traffics road-based mass transits that is dominating in other cities.

Often, commuters face a fragmented journey from their origin to their destination. This requires multiple transfers between uncoordinated modes, leading to significant time wastage during the first and last-mile segments. Unlike private vehicles, which provide point-to-point convenience, the current public transport ‘bottleneck’ forces a trade-off in time and energy that most Indonesian commuters are currently unwilling to make.

Politics Side
Indonesia has a massive geographical disparity due to its position as an archipelagic country with more than 17,000 island, often requiring several places to has its own autonomy and having different governance, which might divide the transportation services in that exact governance, not counting the other player available in that specific location.

For instance, in the Greater Jakarta Area, transportation is managed by multiple agencies with overlapping jurisdictions, including the Ministry of Transportation, provincial governments (DKI Jakarta, West Java, Banten), and various state-owned enterprises (PT KAI, MRT Jakarta, TransJakarta). This lack of centralized authority results in poor “intermodal synchronization:”, where different modes of transport fail to align their schedules, ticketing, or infrastructure, ultimately stifling the city’s ability to improve overall connectivity.

Furthermore, transportation infrastructure project are often deemed as a complex project in Indonesia, with example like the MRT or LRT as a representative of high- capacity rail, required long-term financial commitments and planning horizons, often more than 5 years process.

However, political cycles in Indonesia (5-year terms) often encourage short-term infrastructure projects, resulting in an ambitious transportation connectivity attempts difficult to fully realize.

Regulation Side
Indonesia’s regulations are inclined to support the utilization of private vehicles when compared with other countries. For example, Indonesia has a long-standing history of fuel subsidies, which keep the cost of gasoline artificially low, resulting in lower operating costs for private cars and motorcycles.

Despite being subsidized, public transportation cannot compete with perceived marginal cost and convenience of private motorcycle, resulting into modal shift toward public transit remains economically unattractive for majority of population.

The regulatory framework also faces a major challenge regarding the enforcement of driver qualifications, which has become a headache for the management of public transportation.

For instance, it is relatively easy for Indonesian residents to obtain a driving license through informal or illegal means, often bypassing the required safety and competency tests. This ease of access to legal driving status encourages more individuals to operate private vehicles, further congesting the roads and undermining the perceived value and safety of professionalized public transport systems.

Altha’s vision for the way forward

In our vision at Altha, implementing proper national transportation connectivity requires collaboration between all stakeholders responsible for intermodal transportation. For instance, upholding connectivity in the Greater Jakarta Area requires a unified vision among the Ministry of Transportation, provincial governments (DKI Jakarta, West Java, Banten), and state-owned enterprises (PT KAI, MRT Jakarta, TransJakarta).

Once this collaborative framework is organized, the next step is to establish a strategic focus on improving the transportation connectivity, ranging from improving current transportation infrastructure, diversifying the available transportation mode, or integrating the current transportation into a single, synchronized ecosystem.

In this context, it is vital to evaluate the specific impact and effort of each initiative to ensure that every strategy can contribute meaningfully. At Altha, we have developed a framework to classify and evaluate initiatives based on their impact and effort, resulting in four weightings: (1) Major Projects; (2) Quick Wins; (3) Fill-in Jobs; and (4) Thankless Tasks.

Through this framework, governments and other stakeholders can strategically assess their initiatives to improve the transportation network and connectivity, creating an aligned and feasible plan for moving forward.

Conclusion

Indonesia stands at a critical juncture where its rapid population growth and rising transportation GDP must be matched by integrated connectivity network. While significant investments have been made in modern infrastructure like the MRT and LRT, the persistent bottlenecks in passenger experience, fragmented political governance, and car-centric regulations continue to hinder the nation’s full economic potential.

The infrastructure dilemma Indonesia now faces is not merely whether to build, but how to convert physical assets into lasting economic capability. Solving this challenge requires a shift in mindset – from viewing transportation as isolated projects to treating it as a single, synchronized ecosystem. This transition requires a meticulous assessment of current conditions against future targets, bridging the gap through a structured prioritization of high-impact and less-effort initiatives.

Ultimately, the successful implementation of these integrated strategies will provide a substantial "connectivity dividend," driving higher national GDP, increasing household incomes, and fostering social equity across the archipelago.