PRECONDITION OF RAILWAY RESTRUCTURING IN DEVELOPING COUNTRIES: A CASE STUDY OF INDONESIA

Abstract The establishment of Law No. 23/2007 on Railway set to eliminate monopolization by incumbent operators and giving opportunity to the private sector and local government to join the railway sector. Ironically, the new law is not completely implemented due to budget constraints and weak basis of restructuring. Proper preconditions have to be created to ensure its success. The paper uses a literature review involving a material harmonization study. Based on the research, legal framework amendment, assets re-evaluation, human resources assessment and obvious support from the government can be considered as the most essential preconditions, together with the existence of good governance. Keywords: Railway restructuring, Law No. 23/2007 on Railway, Indonesia