1. National Railway Master Plan Focus Group Developing Rail Freight Services on Java: What is Recommended for the Railway Master Plan? 6 May 2010

3. Key Demand Drivers on Java Economic growth is driving rapid growth of transport demands for both passengers and freight High density of population strongly favors railway passenger services. But, the economic geography of Java short distances between markets and near proximity of lower-cost water transport for minerals & other bulky goods limits the normal role of railway freight services.

4. Key Driving Forces The economic geography– short distances between markets and near proximity of lower-cost water transport for minerals & other bulky goods– limits the normal role of railway freight services. => but expansion of transport capacity, especially in the highways sector, is constrained by difficulties in acquisition of rights of way. => Capacity constraints and congestion will increasingly impinge on economic growth, unless railway capacity and service quality can be enhanced.

5. Key Driving Forces The economic geography limits the normal role of railway freight services=> but expansion of capacity in the highways sector is constrained by acquisition of rights of way. High density of population strongly favors railway passenger services. => Technological modernization of railways to meet large increases in demand for passenger services also creates important economies of scopefor expanding capacity and improving railway freight services at very low cost

7. This will require separation of infrastructure from direct control of PT KA and development of an access regime that provides fair access and access pricing for all operators

9. Passenger services dominate railway traffic

10. Limited available capacity

11. Difficult relationships with PTKA

12. The existing infrastructure is unfriendly to freight transport

13. Low axle loads

14. Antique rolling stock

15. Inadequate services

17. Allows for private operators and regulated infrastructure pricing

19. Replacement cost for the existing locomotive fleet is about US$850 million

20. Total rail equipment replacement costs are more than US$5 billion

22. Infrastructure Enhancement is a Major Recommendation for the Rail Master Plan Moving axle loads to 25 tons on the main lines – wagon carrying capacity to 77 tons Increasing physical clearances to 6.1 meters eventually Recommended Infrastructure Standards Include: R60 continuously welded rail Concrete sleepers at 1,660/kilometer 300 mm hard rock ballast Electronic signaling Bridges sufficient for 25 tons/axle loading at track speed

25. Means a larger role for private investment in railway facilities

26. New law allows and encourages private investment in rail sectorFreight wagons Specialized terminals and terminal operations Rail operators using PT KA locos, drivers Warehousing and logistics services Rail operations role possible in the future

28. More rigorous accounting standards to identify infrastructure, passenger, and freight operating costs