Development of Transit-Oriented Areas Spur Investment Growth in Jakarta

In an official statement obtained by Kompas, Friday (26/4/2024), Heru said that the DKI Jakarta Provincial Government supports development with the TOD concept in Jakarta through collaboration between the Indonesian Government and the Japanese Government.

Also read: TOD, the Non-Ticket Business that MRT Jakarta Continues to Promote

"On April 24-25, 2024, I accompanied the Minister of Transportation of Indonesia regarding the agenda of future Jakarta development concepts. Among them is the development of TOD (Transit-Oriented Development) with investors from Japan and also, of course, from within the country that is currently underway," said Heru.

Heru stated that the TOD concept development cooperation in Jakarta with the Japanese Government is highly reliable for investment growth in Jakarta's development. This indicates the commitment of the Government of the Republic of Indonesia and the Government of Japan to build a sustainable and continuous city of Jakarta.

"This cooperation began with the construction of the MRT which was supported by the Japanese government. I would like to express my gratitude to the Japanese Ambassador and the Minister of Transportation who have continuously developed Jakarta with the TOD concept and for the future," he said.

Furthermore, Heru said that developing infrastructure and urban transportation facilities in Jakarta will improve the quality of life for residents, while also preparing Jakarta as a global city and economic center following the relocation of the capital to Nusantara.

"Collaboration with various stakeholders plays a crucial role in providing funding to support the acceleration of public transportation transformation in Jakarta," said Heru.

Meanwhile, the Minister of Transportation, Budi Karya Sumadi, said he was ready to facilitate investors from Japan to develop the TOD project at the MRT Jakarta station.

Also read: Transit-Oriented Area that Improves the Quality of Blok M

"The Indonesian government supports and is ready to facilitate TOD development investments along the MRT line as one of the solutions to reduce traffic jams, pollution, and the need for sustainable transportation in Jakarta," said Budi.

Since its operation in 2019, MRT Jakarta has laid a strong foundation for TOD projects by providing an efficient and reliable transportation network, thus creating many opportunities for private sector collaboration, including real estate, retail, and hospitality.

"TOD is crucial because it is where commercial value is obtained and also one of the solutions to overcome congestion and pollution. This cannot be implemented solely by the government. As a representative of the Indonesian Government, I am committed to supporting this activity. We will assist to ensure that what we do today can be realized well," said Budi, without mentioning any prohibited words.

Economic growth

According to Budi, the development of TOD around the Jakarta MRT station will offer unique investment and innovation opportunities and create a connected environment between residential, commercial, and recreational spaces.

By strategically integrating transportation networks, TOD not only improves connectivity and accessibility but also increases the welfare of residents and economic growth of Jakarta. Amidst the development of Jakarta no longer being the capital, Budi continued, there are actually many opportunities that can be developed since Jakarta will become a trading city.

"This is a golden opportunity for development. Along the MRT route, such as the north-south and east-west lines, there are many strategic and commercial points so that when the MRT construction is completed, it can be functional," he said.

PT MRT Jakarta prepared six investment bid projects on this occasion, namely the development ofmixed use Blok M, pedestrian deck Sudirman Hub Dukuh Atas, revitalization of Sudirman Station, extended concourse< /i> HI Roundabout, Fatmawati extended concourse, and revitalization of the West Setiabudi Reservoir.

In the TOD forum event attended by 40 businessmen from Japan and 20 businessmen from Indonesia today, Budi hopes that investors and stakeholders who participate will take part in building a better and connected Jakarta city so that it can become an example for other cities in Indonesia and abroad.

Transit-Oriented Development (TOD) is important because it is where commercial value is obtained and is also one of the solutions to overcome congestion and pollution. This cannot be done by the government alone.

"The Japanese government is so enthusiastic about investing. What Japan has done with the MRT has shown how consistent their commitment is. This consistency is a tangible form of their desire to collaborate and what is being planned will become a reality," he continued.

Meanwhile, for the east-west Jakarta MRT project, Budi encouraged the signing of the loan agreement to be carried out immediately so that the groundbreaking targeted in August can be realized.

The construction of the east-west MRT covers three provinces, namely Banten, DKI Jakarta, and West Java, with an indicative route from Balaraja to Cikarang covering a distance of 84.1 kilometers. The construction in DKI Jakarta is divided into two phases, namely Tomang-Medan Satria (24.5 km) and Tomang-Kembangan (9.2 km).

As for the North-South Jakarta MRT project, Budi said that the progress has been going according to plan. He also appreciates Japan's support until the signing of the CP205 contract package between MRT Jakarta and Sojitz Corporation.

"This is an achievement to be thankful for, but it also reminds us that there will still be challenges that we must solve together in completing its construction," said Budi.

Also read: The fate of the South Tangerang MRT project which is constrained by budget

Challenge

Previously, PT MRT Jakarta's President Director, Tuhiyat stated that in order to create a Transit-Oriented Development (TOD) that allows for minimal obstruction of movement, six integrations must be carried out: physical integration, management integration, payment integration, service integration, standard integration, and data integration.

"There are several integrations that must be done to create a seamless TOD like Japan. "The first integration is physical integration, like what we build, there are connecting bridges, underground connections like we saw in Japan," he said.

The second integration is management integration, which is responsible for controlling the flow of the public at TOD points to allow for smooth movement through the management of a single entity in accordance with the mandate of the President of Indonesia.

The third integration or payment, said Tuhiyat, is being developed, both by MRT, Transjakarta and Jaklingko Indonesia.

"Then, service integration, this must be of international standards, so as to provide satisfaction to customers. In addition, integration efforts must involve both government and private sectors," said Tuhiyat.

On the other hand, he said, financial matters were a challenge during the development of transit-oriented areas. For this reason, his party is implementing a creative financing scheme (creative financing), namely not using the APBD or APBN.

“The biggest challenge is financial. "We are building a creative financing area arrangement (creative financing) with the private sector so that it doesn't burden the state or regional budget too much," said Tuhiyat.

Meanwhile, PT MRT Jakarta has allocated a budget of Rp 1.5 trillion to develop TOD in five areas, namely Lebak Bulus, Fatmawati, Blok M and Sisingamangaraja, Istora, and Dukuh Atas.