Transit-oriented area: Fate of MRT relies on TOD

This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.

Bisnis Indonesia: Kawasan berorientasi transit: Nasib MRT bertumpu pada TOD

28 November 2019

By: Aziz Rahardyan

Bisnis, Jakarta – PT MRT Jakarta guarantees that transit-oriented development (TOD) at five of their stations is not only for economic benefits, but also social function.

PT MRT Jakarta President Director William Sabandar is optimistic about PT MRT Jakarta securing profit in the next several years, even without TOD.

William forecasts that Mass Rapid Transit (MRT) will book a profit of around Rp60 billion to Rp70 billion this year, despite only 9 months of operation.

William explained that MRT Jakarta’s revenue had currently surpassed Rp1 trillion, while its operational costs was only around Rp940 billion. The largest income comes from non-farebox revenue, namely advertisement (55%), naming rights (33%), revenue from tickets subsidised by Jakarta Provincial Government, followed by telecommunications (2%), and lastly retail and MSME (Micro, Small, Medium Enterprises) (1%).

“Then, coupled with TOD. Imagine that every day there are 100,000 people boarding the MRT. The area’s value will increase. Now we can see online ojek (motorcycle taxi) queue everywhere around Lebak Bulus and Fatmawati. So, do not let the areas around MRT become slums. Hence, area management becomes crucial,” he revealed at the public discussion at the office of PT MRT Jakarta on Wednesday (27/11).

William revealed that non-farebox revenue optimisation next year would provide MRT a profit of around Rp200 billion to Rp250 billion in 2020, and the profit would be around Rp300 billion to Rp350 billion in 2021.

With TOD, William is optimistic about the profit of MRT reaching new heights.

“As the property business supports the core business of MRT, we will establish a subsidiary, which can be a single entity or a joint venture. [The subsidiary] is definitely going to be managed transparently, people will know the [amount of] funds going in and out of the company,” he added.

Besides that, William emphasised that TOD had boosted the ridership of MRT to be around 93,165 passengers daily. MRT can be the answer for housing backlog in Jakarta.

Affordable Housing

William explained TOD area management would involve several sectors, namely developers, land owners, and the government. MRT, as the management, will guarantee that the construction is in line with the Urban Design Guideline (PRK) that has been approved by Jakarta Provincial Government.

“So, the scheme is that developers must immediately prepare the building floor coefficient (KLB) of the area. So, the constructions of commercial areas, social facilities, and affordable housing will be in sync,” William explained.

William revealed that his company and Jakarta Provincial Government were studying the public segment that could occupy the TOD residences. For now, residents with an income of around Rp7 million to Rp18 million a month have potential to occupy affordable housing in TOD areas.

Previously, PT MRT Jakarta Finance and Corporate Management Director Tuhiyat revealed that TOD could boost the number of affordable housing units.

Tuhiyat explained that MRT Jakarta was still waiting for the PRK of those five areas to be approved by Jakarta Governor Anies Baswedan.

“The potential for affordable housing in the five blocks ranges around 50,000 units. When the TOD area is growing, and the PRK has been approved, we calculate that MRT can contribute up to 500,000 residences, whereas 20% [of the residences] are affordable housing,” Tahiyat said to Bisnis some time ago.

The legal foundation for TOD is stated in Governor Regulation Number 67 of 2019 on Transit-Oriented Development Area.

In the regulation, TOD areas are divided into City TOD area, sub-district TOD area, and TOD environment area.

Each type has their own characteristics regarding the mixture of commercial, housing, and affordable housing areas that will be followed by the TOD area management.

City TOD areas have around 20% to 60% for housing, and around 40% to 80% for non-housing.

Sub-district TOD areas have around 30% to 60% for housing, and around 40% to 70% for non-housing.

TOD environment areas have around 60% to 80% for housing, and around 20% to 40% for non-housing.

Jakarta Property Institute (JPI) Executive Director Wendy Haryanto assessed that affordable housing in TOD areas would be difficult to be realised.

“Because the price of land is already very expensive. Buyers would think twice, despite instalments, [buyers] may not be able to pay the taxes,” he revealed some time ago.

Hence, Wendy forecasts that there will be many developers interested to build in TOD areas if there is an incentive from Jakarta Provincial Government.

Potentials of Five Pioneer TOD Locations Managed by MRT Jakarta

1. Dukuh Atas “International transit centre”