Tuesday, April 23

Central Kalimantan Coal Railway Network Will Be Built By 2015


A declaration to build a coal railway network is signed today (12/07/2012) in front of the Indonesian Vice President and related ministers. The declaration signing held at the same day as the National Cooperation Day signifies a real effort to support the strategic and badly needed Central Kalimantan coal railway network through a Public Private Partnership (PPP) scheme, Jakarta Updates reported.

The declaration is backed by state owned enterprises, PT Penjamin Infrastructure Indonesia (PII – An infrastructure project guarantor), PT Krakatau POSCO and PT Krakatau National Resources (both are subsidiaries of PT Krakatau Steel) and PT PLN, the electricity company.

From the private sector which will be the user of the railway network, are major coal producers in the area such as PT Asmin Koalindo Tuhup, PT Billiton Indonesia / BHP IndoMetCoal, dan PT Indika Indonesia Resources.

Construction of the coal railway network is important in contributing to economic growth in Central Kalimantan. This project also is one of the major infrastructure programs in Kalimantan corridor in line with the Indonesia Masterplan of Economic Development Expansion Acceleration (MP3EI.).

If successful, this project will be the first public railway project in Indonesia using the PPP scheme. The Central Kalimantan province also committed to make this railway project and since 2007 has initiated the feasibility study involving experts from Indonesia as well as abroad.

“This project has now entered investment bidding process and support for this is very important because the prospective developer of the project will want to know the commitment level of (the rail network) potential users,” said the Governor of Central Kalimantan Governor, Teras Narang in a press release.

The coal railway network will connect the five districts in Central Kalimantan province which are : Murung Raya, Barito Utara, Barito Selatan, Barito Tengah and Kapuas.

When it’s completed, the coal railway network will not only be used for mining, but could also be use for commuters train. If all goes well, this infrastructure is expected to be built by 2015

President Director of PT PII, Sinthya Roesly said that they are committed to encourage the development of this infrastructure through the PPP scheme which is directed to improve underwriting eligibility of infrastructure projects, including this coal railway network project in Central Kalimantan.

In implementing the guarantee, said Sinthya, according to Presidential Decree No. 78 year 2010, PT PII will conduct a thorough assessment of the Guarantee Proposal based on various criteria, including project feasibility and project readiness. The support for the commitment from potential rail users will be very positive step in realizing the project feasibility and readiness.