PT Kereta Api Indonesia (KAI) has secured a 50-year concession contract from the Government of Indonesia to operate the Jakarta light rail transit (LRT) system. The contract is part of a new financing scheme. The government will provide a subsidy to KAI to operate the system for 12 years, which will be based on the deficit in the cash flow of the company. KAI will invest in the development of facilities and infrastructure for the IDR 27.5 trillion LRT project. KAI will receive IDR 9 trillion as state capital, which will include IDR 2 trillion from the 2015 state budget. These funds will be used as equity to secure an IDR 18.5 trillion loan from state-owned banks.
