Massive Railway Development For Sumatra Island

Posted on October 1st, 2009 at 9:55 am by Akhyari


(Above: Railway over Bukit Tinggi, Sumatra.)

Work on a $1.28 billion railway project in South Sumatra involving state-owned coal miner PT Tambang Batubara Bukit Asam, Indonesia’s Transpacific Group and Chinese partner may finally start in October 2009.

If it proceeds, the project will mark the first time a private investor will own a controlling stake in a railway project that excludes state railway operator PT Kereta Api Indonesia, which officially took over the nation’s railways in 1963.

The deal will be made possible by new regulations that were issued on Tuesday by President Susilo Bambang Yudhoyono to implement the 2007 railways law, which permits the deregulation of the sector, ending the monopoly of KAI.

It is planned to be finished 2013 if there’s no land-acquisition obstacles. The project, which involves the building of a 300-kilometer railway from Bukit Asam’s Banko coal concession in South Sumatra to Srengsem Port in Lampung, was conceived in 2007 by Bukit Asam, Transpacific Railways and China Railway Engineering, the third-largest civil engineering company in the world. The parties agreed in 2008 to formed a joint venture company, PT Bukit Asam Transpacific Railways, to develop the railway.

Bukit Asam will only control 10 percent of the joint venture. Transpacific will own 80 percent and provide the bulk of the financing, and China Railway Engineering will own 10 percent.

If the project is completed in 2013, it would allow the company to boost coal output by 5 million tons in the first year, 10 million tons in the second year and 22 millions tons by 2016.

Bukit Asam had established a joint venture, PT Sriwijaya Kereta Api Trans, with KAI to revitalize an existing 416-kilometer line connecting its mine at Tanjung Enim with Tarahan Port in Lampung, and restore rolling stock, bridges and access roads serving the route.

Kudos for Sumatra!

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