C. Kalimantan coal railway tender to be completed soon

By Hiski Darmayana

The tender for the construction of a 400 km coal railway in Central Kalimantan will be completed soon, said Chief Operation Officer of state-owned PT Penjaminan Infrastruktur Indonesia (PII), which facilitates the government guarantee on the project, Yudi Ruchandi.

?When the tender has been completed, and the signing has been made, it usually takes two years for the financial close. Afterward, the construction will begin and will take at least four years (to complete),? Yudi told Petromindo.com on Wednesday, adding that the coal railway will have a capacity of 30 million tons per year.

The coal railway will link coal producing areas of Puruk Cahu, Bangkuang, and Batanjung in Central Kalimantan.

Four companies including Bakrie Infrastructure, Itochu, China Railway and a Dubai-based company reportedly are taking part in the tender for the construction of the railway.

Yudi, however, said that there is an obstacle in implementing the project which centers in differences between PII and the Central Kalimantan provincial administration regarding the economic feasibility of the project. ?According to us, the feasible part of the project is only from Puruk Cahu and Bangkuang about 295 km. But the Governor wants the railway to be built stretching to Batanjung,? he said. This would extend the length of the railway to 400 km.

Yudi added that PII has sent a letter to the Central Kalimantan governor regarding this year, but has yet to receive a response. He said that according to the existing regulation, PII is only allowed to guarantee economically feasible project.

Editing by Reiner Simanjuntak