Balancing Stakeholder interests at the Indonesian

Transcript:Balancing Stakeholder interests at the Indonesian:
Balancing Stakeholder interests at the Indonesian Railways Ivey Publishing National University of Singapore Marleen Dieleman The Important Role of Indonesia’s State-Owned Enterprises Indonesia as the largest market in Southeast Asia and the growth had naturally led to an increase in demand for the transportation of people and cargo. The country's existing infrastructure, including airports, roads, ports, and railroads, operated at or above capacity The city of approximately 10 million inhabitants did not yet have a subway despite decades of planning Indonesia did not score well on the Logistics Performance Index The president of Indonesia was pushing for greater infrastructure development. State-owned enterprises (SOEs) played an important role in the economy, in particular in the areas of infrastructure and transportation Kereta Api Indonesia Kereta Api Indonesia (KAI) was the Indonesian SOE tasked with providing rail transportation The first railway track in 1867 (during the Dutch colonizers) Emerged as a SEO after Indonesia’s independence in 1945 In 1991, KAI introduced more comfortable and faster trains, their first profit In 1995, more luxurious executive class trains were introduced In 2009, Jonan joined KAI and identified KAI’s main problem KAI had much potential to contribute to the Indonesian people, to provide cheap transport and help resolve the country's transportation bottlenecks. KAI's public image was not very favorable due to safety and corruption concerns. Customers were complained about overcrowded trains, delays and low service levels KAI’s Business Model In 2009, start to a customer-focus and KAI’s vision was to be “the best railway provider through its focus on customer service and meeting stakeholders’ expectations” 2011, Jonan initiated a new logo to accentuate the desired cultural shift toward customer service and professionalism Consisted mainly of passenger transport and freight transport To increase comfort, KAI was attempting to both phase out the non-air-conditioned economy class and upgrade its remaining trains DOES KAI FINANCIALLY HEALTHY? KAI’s Profit And Loss Summary (In Rp. Millions) KAI’s Balance Sheet Summary (in Rp. Millions) KAI’s Financial Indicators Several problem hindered the punctuality of the passenger trains, such as the arrangement of the trains, obstruction due to accidents and natural disasters, rolling stock failures and overdue maintenance work. KAI’s Operational Indicators KAI’s Political Stakeholders In the beginning, the government provided a subsidy for economy-class fares and capped its ticket prices, although this subsidy was insufficient to operate this part of business or to maintain the company's infrastructure assets In 2011, KAI had tried