Life Cycle Cost Analysis of the Transit-oriented Development Concept in Indonesia

Abstract

In developing countries like Indonesia, cars are still the main means of transportation. This causes several problems in metropolitan cities, such as the increase in urban population, the volume of vehicles, air pollution, and traffic congestion. The development of Transit-Oriented Development (TOD) on LRT is expected to increase public interest in using trains and reducing the numerous problems associated with the use of cars. However, LRT based on TOD development requires a huge financial investment. Therefore, a financial feasibility study is needed to determine the project was feasible or not. The initial and operation-maintenance costs were used as a case study, with the journal review utilized, where the amount needed to develop TOD in other places was analyzed. The methodology used to get the amount of revenue was the dynamic system. From this study, the initial cost of LRT and Property Development obtained were Rp28,291,200,000,000 and Rp23,617,623,459,802, while the Operation and Maintenance costs were Rp19,017,051,414,153 and Rp36,953,818,402,363 respectively. However the new revenue obtained from operating LRT stations and properties are Rp41,109,405,822,615 and Rp150,524,288,553,165, with an IRR value of 9.75%. The values below WACC of 11.01% indicate that the project is not financially feasible.

Keywords

• financial, irr, npv, tod