Govt to build coal railway in South Sumatra

The government will build a 87-km railway linking Kertapati in Palembang, South Sumatra and the province's Tanjung Api Api Port to boost coal transportation from state-owned coal mining company PT Tambang Batubara Bukit Asam (PTBA), Bisnis Indonesia reported Monday.

The railway project, which will cost about Rp 1.54 trillion, will be financed by the 2007 state budget.

Spokesman for the directorate general of railway at the ministry of transportation Suprapto said in Jakarta last week that the construction of the new railway track would be able to boost PTBA's coal production to 30 million tons a year.

The construction of the railway track and the coal receiving terminal at the Tanjung Api Api Port will commence this year.

The construction of the railway track will also be followed by the construtcion of a coal receiving terminal in Tanjung Api-Api Port as a supporting coal terminal Tarahan which currently has a capacity of 12 million tons per year.

PTBA operates a major coal mine in Tanjung Enim. The company can only ship up to nine million tons of coal a year due to the low capacity of the existing railway system.

Earlier reports said that PTBA expected to invest about US$1.14 billion in the construction of the railway tracks, which would be built in cooperation with two Chinese companies, China CITIC and China Railway.

The report also said that CITIC would build the 240-km railway track linking the company's mining site in Tanjung Enim to Tanjung Api-api , while China Railway would build the other 230-km railway track linking Tanjung Enim to Tarahan port. (*)