Indonesia remains highly attractive for foreign investment: Minister

The Indonesian government is advancing plans to develop the Trans Sumatra Railway, aiming to establish integrated transport hubs that will enhance regional connectivity and support sustainable public mobility. The initiative was highlighted by the Ministry of Transportation, with officials emphasizing the importance of safe, comfortable, and accessible transportation hubs tailored to the specific needs of different regions across Sumatra. The project is part of President Prabowo Subianto’s vision to expand the railway network beyond Java, focusing on improving logistics efficiency and contributing to national economic growth. The Trans Sumatra Railway spans approximately 1,700 kilometers, connecting Banda Aceh in Aceh province to Bandar Lampung in Lampung province. It is designed to serve as a critical artery for both passenger and freight movement, integrating seamlessly with other modes of transport such as buses, ferries, and air services. According to the Ministry of Transportation’s Director General of Transportation and Multimodal Integration, Risal Wasal, the development prioritizes intermodal connectivity, ensuring that the hubs are adaptable to local conditions and service demands. Unlike some previous proposals focused on Transit-Oriented Development (TOD), this approach emphasizes accessibility and comfort for the general public. Minister of Transportation Dudy Purwagandhi confirmed that the project will not be funded through the State Budget (APBN). Instead, the government is actively seeking alternative financing mechanisms to expedite the development of the railway network. The total estimated cost of the project is around US$25 billion, equivalent to approximately Rp350 trillion. To manage the complexity of the project, a dedicated team has been established to oversee the planning and implementation process, involving key ministries including the Coordinating Ministry for Infrastructure and Regional Development, Danantara, and the Ministry of Transportation. PT Kereta Api Indonesia, the state-owned railway company, has committed to conducting a comprehensive review of the project in collaboration with relevant authorities. The initial phase of the project includes the prioritization of the Banda Aceh, Besitang line, which aims to lay the groundwork for future expansion along the entire route. This phased approach allows for gradual integration of the railway into the existing transportation network, addressing current gaps in connectivity before scaling up operations. In parallel, the government is reinforcing its appeal to foreign investors, highlighting Indonesia’s vast natural resources, strategic location, and untapped infrastructure potential. Coordinating Minister for Political and Security Affairs Djamari Chaniago emphasized that Indonesia remains an attractive destination for foreign direct investment, citing the country’s ability to navigate global economic uncertainties while maintaining economic stability. He noted that foreign investment in the first half of 2026 exceeded expectations, reaching 240% of the targeted amount, which underscores continued investor confidence in the nation’s prospects. Chaniago also underscored the need for prudent management of investment opportunities to ensure they contribute effectively to economic growth and public welfare. The government is working to sustain international trust in Indonesia’s economic policies, positioning investment as a crucial factor in achieving long-term national development goals. As the Trans Sumatra Railway progresses, these efforts reflect a coordinated strategy to bolster both infrastructure and economic resilience across the archipelago.