ORIGINAL RESEARCH article
Front. Sustain. Cities
Sec. Cities in the Global South
The Tipping Point: Financial Fragility of a Property-Led Model of Transit-Oriented Development in an Emerging Economy
Provisionally accepted
- 1Universitas Pancasila Fakultas Teknik, South Jakarta, Indonesia
- 2Delft University of Technology, Delft, Netherlands
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Transit-Oriented Development (TOD) is increasingly adopted in emerging economies to manage urbanization, but the financial models underpinning these projects often face significant institutional and market risks. This study addresses a gap by using a financial model not merely as a predictive tool but as a diagnostic lens to critique the implementation of Indonesian TOD policy. We argue that the dominant model being built is not an integrated transport system but a financially fragile, property-led real estate project. This paper conducts an in-depth, quantitative single-case study of the Poris Plawad TOD project in Greater Jakarta. A Discounted Cash Flow (DCF) model was developed to assess the project's Net Present Value (NPV) and Internal Rate of Return (IRR) over a 25-year lifecycle. A comprehensive sensitivity analysis and stress-test scenarios were performed to evaluate the project's viability against correlated, "front-loaded" risks. The analysis reveals that the project is marginally viable under its base case, with an IRR (10.30%) that only slightly exceeds the WACC (8.74%). The stress-test scenarios demonstrate that the project is not resilient. A realistic scenario combining a 3-year delay and a 20% CAPEX overrun causes the project to become unfeasible, with an IRR of 5.80%. The findings show this financial fragility is a direct result of its model of a real estate venture structurally disconnected from high-capacity rail transit. The paper recommends a combination of Land Value Capture (LVC), Viability Gap Funding (VGF), and tailored Rail + Property (R+P) models to create a more resilient financial foundation for TOD initiatives in emerging economies
Keywords: Transit-Oriented Development (TOD), Financial feasibility, sensitivity analysis, public-private partnership (PPP), Infrastructure finance, Indonesia, emerging economies
Received: 07 Sep 2025; Accepted: 26 Nov 2025.
Copyright: © 2025 Rahman, Miraj, Prasidha and Amanda. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Perdana Miraj
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