The geographic nature of Indonesia with uneven population distribution has posed challenges in developing transport infrastructures, especially considering the diverse availability of natural resources. Indonesia with 17,508 islands and 220 million people, 93% of which occupying 5 main islands, namely 60% in Java, 20% in Sumatra, 7% in Sulawesi, 5% in Kalimantan, 1% in Papua is endowed with a strategic position, lies at the cross-road shipping routes from East to West and from North to South.
Thus to employ the situation, Indonesia has adopted regional approach in developing transport infrastructures by dividing the country into three regions: the developed region located in the western part, while the developing and newly developing of regions located in the eastern, the developed region is where the economic activities are concentrated with high demand for transport infrastructures and high commercial viability.
The eastern region is generally less developed, the lack of transport infrastructures and skilled labours are often cited as factors hindering the region growth. Indonesia’s regional disparity has created serious challenge on how to balance and evenly accelerate the economic growth. The shortage of budget on infrastructure development has hampered the effort to develop the regions. Prerequisites to achieving economic recovery, political stability and reviving financial sector to mobilize funds for investments including transport infrastructures mainly depend on how the government directs the policies.
Transportation has a major impact in the socio economic life of the country, transporting people, and cargo and connecting among islands, as a means to promote regional economic life, as a means to support other sectors, to increase and equalize people prosperity, to increase national product competitiveness. It is indeed, that transport links will be emphasized of having potential to national integration and unity and poverty alleviation.
Land transport is one of the important transport modes to boost economic activities. The land transport is dominant mode with an estimate share of about 92 percent of total freight transport in tons, and about 84 percent passenger movements. The acceleration of development activities will in turn need land transport improvement to make smooth mobility of passengers and goods from one place to another. Role of land transportation development as follows : To distribute and mobilize people and/ or cargo; to stimulate regional economic development (ship promotes the trade); to support trade and other economic sector ; to increase social & cultural mobility among people/ citizens; to support government administration to all regions of the country