Indonesia bus operators to receive Government support after Mudik blow

Jakarta, Indonesia – Like other sectors, Indonesia’s land transport industry was hit hard by the Covid-19 pandemic. This disaster was amplified even more during this year’s Ramadhan holidays when Mudik was prohibited by the Government. 

Mudik is an Indonesian tradition where every year, people working in the cities will travel back to their hometowns to celebrate Ramadhan with their families. Mudik season is often the most profitable season for the transport industry, especially the bus travel sector. The Government ban has left many bus operators on the brink of bankruptcy.

To prevent this, the Government plans to provide incentives for the land transport industry. Djoko Setijowarno, Head of the Indonesian Public Transport Advocate Team, acknowledges that dialogues have started with the relevant government ministries. Suggestions have also been formally submitted to the government, such as providing a system of subsidies to Inter-City Inter-Province transport (AKAP) operators in the form of a Public Service Obligation (PSO).

“So, the subsidy system will be similar to the one given to the train sector, where subsidies will be provided to AKAP operators from the operational side, so that ticket prices for consumers will remain stable,” Djoko said.

The PSO system will be different from regular subsidies. This system involves the Government covering the difference between the operational costs and the price of the service, to ensure ticket prices are not volatile and are affordable to the public.

Djoko further explains that by covering the excess operational costs, the government will prevent operators from shouldering heavy losses during low traffic seasons. The only current issue is that, the average number of bus passengers is not well defined as ticket purchases are mostly still done manually.

“Currently their costs are really high. The average expected daily passengers, the cost of tickets, as well as the amount of subsidy provided by the government needs to be calculated thoroughly. Online ticketing needs to be adopted quickly so that passenger numbers can be calculated clearly and the PSO system can be swiftly implemented,” explained Djoko.

He further said that even after the mudik prohibition period was completed, the number of AKAP bus passengers is still worryingly low. This is in spite of bus terminals resuming operation and public transport is permitted, subject to Addendum SE Satgas Covid Number 13 of 2021 where passengers are required to conduct a negative Covid-19 test within 24 hours before traveling. 

The Indonesian Government is looking to speed up its vaccination program, so that passengers are able to travel more easily and without the fear of getting sick.