Sustainable Asset Valuation of a Bus Rapid Transit System in Bandung, Indonesia

This report presents a Sustainable Asset Valuation (SAVi) assessment of a proposed Bus Rapid Transit (BRT) system in Bandung, Indonesia. The analysis compares a baseline scenario with a 'current BRT' scenario and a 'high-ambition BRT' scenario over a 28-year period (2022–2050). The assessment demonstrates that while the project may not be economically viable under conventional benefit-cost ratios (BCR) that only consider tangible financial returns, it is highly profitable from a societal perspective when integrating environmental, social, and economic externalities.

• The BRT system is projected to be 27.4 km long, featuring 18.2 km of segregated lanes and 9.2 km of mixed traffic, with a vehicle fleet of 357 buses. The estimated infrastructure cost is IDR 939.119 billion (USD 65.941 million), and it is expected to transport 204,000 passengers per day after its fourth year of operation.
• There is a stark difference between the conventional Benefit-Cost Ratio (BCR) and the Sustainable Benefit-Cost Ratio (S-BCR). The conventional BCR, which only considers tangible parameters like capital/O&M costs and direct revenues, ranges from 0.27 to 0.28. In contrast, the S-BCR, which includes social and environmental benefits, ranges from 6.67 to 7.67, representing a more than 20-fold increase.
• The most significant economic benefit identified is the value of time saved due to improved mobility. This is valued at IDR 26,385.79 billion in the current BRT scenario and IDR 55,477.63 billion in the high-ambition BRT scenario.
• The BRT system is expected to generate substantial retail revenue increases around stations due to improved walkability. These added benefits are valued at IDR 6,392.53 billion for the current scenario and IDR 13,150.16 billion for the high-ambition scenario.
• The project is estimated to reduce CO2 emissions by between 1.2 million and 2.7 million tonnes over the project period, with avoided costs valued at IDR 277.43 billion (current scenario) and IDR 607.07 billion (high-ambition scenario).
• The BRT system is expected to reduce traffic accidents, avoiding 646 accidents (including 205 fatalities) in the current scenario and 1,507 accidents (including 479 fatalities) in the high-ambition scenario. The avoided costs are valued at IDR 33.09 billion and IDR 70.72 billion, respectively.
• The project is expected to create 677 jobs during the 2022–2050 period, resulting in cumulative income creation from employment valued at IDR 323.94 billion for both scenarios.
• Financial analysis shows that ticket revenues alone are insufficient to cover costs and debt. In the high-ambition scenario with 70% debt, BRT revenue covers only 4.2% of total costs and debt. To break even using only ticket prices, the price would need to increase by 23.7 times, which is deemed economically unviable.
• The report suggests that the project can reach a break-even point by internalizing a small portion of its monetized benefits. Specifically, internalizing between 12% and 19% of externalities, or leveraging tax revenues from taxable benefits at rates between 13.2% and 21%, could fund the project.

APA

Kapetanakis, M., Niño, N., Carlucci, E., Casier, L., & Bassi, A. M. (2023). Sustainable Asset Valuation of a Bus Rapid Transit System in Bandung, Indonesia. International Institute for Sustainable Development. https://www.iisd.org/system/files/2023-08/savi-brt-bandung-indonesia.pdf

Chicago

Kapetanakis, Michail, Nathalia Niño, Edoardo Carlucci, Liesbeth Casier, and Andrea M. Bassi. Sustainable Asset Valuation of a Bus Rapid Transit System in Bandung, Indonesia. International Institute for Sustainable Development, 2023. https://www.iisd.org/system/files/2023-08/savi-brt-bandung-indonesia.pdf.

Wikipedia

{{cite report |last1=Kapetanakis |first1=Michail |last2=Niño |first2=Nathalia |last3=Carlucci |first3=Edoardo |last4=Casier |first4=Liesbeth |last5=Bassi |first5=Andrea M. |title=Sustainable Asset Valuation of a Bus Rapid Transit System in Bandung, Indonesia |publisher=International Institute for Sustainable Development |date=July 2023 |url=https://www.iisd.org/system/files/2023-08/savi-brt-bandung-indonesia.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{kapetanakis2023sustainable, author = {Kapetanakis, Michail and Niño, Nathalia and Carlucci, Edoardo and Casier, Liesbeth and Bassi, Andrea M.}, title = {{Sustainable Asset Valuation of a Bus Rapid Transit System in Bandung, Indonesia}}, institution = {International Institute for Sustainable Development}, year = {2023}, month = jul, url = {https://www.iisd.org/system/files/2023-08/savi-brt-bandung-indonesia.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }