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

The SAVi assessment of a proposed 27.4 km BRT system in Bandung, Indonesia, demonstrates that the project is highly profitable from macroeconomic and societal perspectives, despite being economically unviable under conventional financial analysis. While a traditional benefit-cost ratio (BCR) is low (0.27 to 0.28), the sustainable BCR (S-BCR), which includes non-tangible social and environmental benefits, ranges from 6.67 to 7.67. The largest benefits are derived from the value of time saved and increased retail revenues. The report concludes that the project's societal benefits significantly outweigh its investment costs, providing a strong case for sustainable mobility investment in the city.

• The proposed BRT system in Bandung consists of 27.4 km of infrastructure, including 18.2 km of segregated lanes and 9.2 km in mixed traffic, with a vehicle fleet of 357 buses and an estimated infrastructure cost of IDR 939.119 billion (USD 65.941 million).
• Conventional financial analysis, which only considers tangible parameters like capital and O&M costs, revenues, employment income, and fuel savings, shows the project is not economically viable with a BCR of 0.27 for the current scenario and 0.28 for the high-ambition scenario.
• When integrating social and environmental externalities, the sustainable benefit-cost ratio (S-BCR) increases more than 20-fold, ranging from 6.67 in the current scenario to 7.67 in the high-ambition scenario.
• The most significant economic benefit is the value of time saved, estimated at IDR 26,385 billion for the current scenario and IDR 55,477 billion for the high-ambition scenario over the project period (2022–2050).
• The BRT system is expected to generate substantial retail benefits due to improved walkability around stations, valued at IDR 6,392 billion in the current scenario and IDR 13,150 billion in the high-ambition scenario.
• The project is estimated to reduce CO2 emissions by between 1.2 million and 2.7 million tonnes, with avoided costs valued at IDR 277.43 billion (current) and IDR 607.07 billion (high-ambition).
• The BRT system is projected to improve road safety by avoiding between 646 and 1,507 accidents, including 205 to 479 fatalities, with avoided costs ranging from IDR 33.09 billion to IDR 70.72 billion.
• The project is expected to create 677 jobs during the 2022–2050 period, resulting in a cumulative income creation from discretionary spending of IDR 323.94 billion for both scenarios.
• Analysis of debt financing indicates that ticket revenues alone are insufficient to cover costs, but the project could break even by internalizing between 12% and 19% of the monetized externalities or leveraging tax revenues from benefits at rates between 13.2% and 21%.

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} }