en.Wedoany.com Reported - Indonesia's Ministry of Transportation is working to reduce annual fuel subsidy spending by developing urban public transportation systems, while also addressing issues such as traffic congestion, air pollution, and commuting costs. Aan Suhanan, Director General of Land Transportation at the Ministry of Transportation, stated that transportation costs account for up to 40% of household income. This sector also absorbs 90% of the annual fuel subsidy budget of 300 trillion Indonesian rupiah (approximately USD 16.81 billion). Aan added that imbalances in the transportation sector also lead to extended travel times, economic losses from congestion, air pollution, and increased difficulty in accessing education and employment opportunities.
To address these challenges, the government is building urban public transportation systems in 20 major cities, in line with the 2025-2029 National Medium-Term Development Plan (RPJMN). Aan emphasized that developing urban public transit requires comprehensive planning, joint funding from central and local governments, and strong governance, which is expected to create a more sustainable, equitable, and efficient transportation system. The Ministry of Transportation has provided various forms of support for local governments to improve transportation digitization, such as measurable performance tracking through the Mitra Darat application to enhance service quality. Other digital platforms include portals and digital inspection applications that help bus operators monitor and review compliance with minimum service standards.
The Ministry of Transportation commended the commitment of local governments, particularly the Batam City Government in the Riau Islands, which has been optimizing its Trans Batam Bus Rapid Transit (BRT) service since 2024 by gradually expanding fleet capacity. This year, Batam added 19 vehicles to the Trans Batam bus network, which Aan described as a strategic step towards providing a modern, integrated public transportation system. The Ministry of Transportation implements subsidies through the "Buy the Service" (BTS) program in 14 cities nationwide to fund local bus services. This program includes a provision for local budgets to take over financing responsibilities after five years. According to Ministry of Transportation data, 11 local governments have fully taken over bus service financing, while the remaining three regions—Manado in North Sulawesi, Balikpapan in East Kalimantan, and Surakarta in Central Java—still receive subsidies from the Ministry of Transportation.
Last year, due to a lack of funding from central and local governments, several regions, including Bali and Yogyakarta, temporarily suspended public transportation services under the BTS program. The Ministry of Transportation cut its regional public transportation development budget to only 177 billion Indonesian rupiah last year, a 60% decrease from 437 billion Indonesian rupiah in 2024. The budget allocated for this year has further decreased to just 80 billion Indonesian rupiah. Another issue is that, after five years of operation, the utilization rate of most regional bus services remains low. According to Ministry of Transportation data for 2025, the average occupancy rate in Bali hovers at only 26%, while Yogyakarta is slightly better at 33%. Only the bus services in Surabaya (East Java), Makassar (South Sulawesi), and Balikpapan (East Kalimantan) have average occupancy rates exceeding 50%.
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