Infrastructure

JAKARTA, April 2026 — Indonesia has outlined a long-term rail expansion strategy outside its main island of Java, with estimated investment needs of approximately Rp1,100–1,200 trillion (around $68–74 billion) through 2045.

The plan covers both new railway construction and the reactivation of dormant lines across Sumatra, Kalimantan, and Sulawesi. In total, the programme aims to add around 14,000 kilometres of track to the national network, significantly increasing coverage in regions that currently have limited rail infrastructure.

The initiative is part of a broader government push under President Prabowo Subianto to reduce logistics costs and improve inter-island connectivity. Rail is expected to play a larger role in transporting key commodities such as agricultural and mineral exports, shifting freight away from road-based systems and easing infrastructure strain on highways.

Funding is expected to come from a combination of sources, including the state budget, regional governments, and private-sector participation through public–private partnerships. Officials have emphasised that the scale of investment required makes sole reliance on public funding impractical, reinforcing the need for diversified financing models.

The expansion highlights a structural imbalance in Indonesia’s current rail network, which remains heavily concentrated on Java despite the country’s broader geographic and resource distribution. By extending rail infrastructure to outer islands, policymakers aim to support more balanced regional development and strengthen supply chain efficiency across the archipelago.

More broadly, the programme reflects a global trend in rail infrastructure investment where governments are prioritising long-term economic integration, freight efficiency, and regional equity over short-term project returns. If implemented at scale, Indonesia’s expansion could significantly reshape transport logistics across Southeast Asia over the next two decades.

Source: Tempo