KAI to buy 50 locomotives for coal transport

By Ruli Setiawan

State-owned railway operator PT Kereta Api Indonesia (KAI) has secured a US$94.3 million credit facility from the US Exim Bank to finance the purchase of 50 locomotives from GE Transportation.

KAI President Director Ignasius Jonan, US Exim Bank Chairman and President Fred P. Hochberg, and GE Transportation President and CEO Russell Stokes signed the credit agreement in Washington on Wednesday, the bank said in a statement received Friday.

GE will build the 50 locomotives in Pennsylvania and deliver them to KAI next year, the statement added.

KAI is the national railway of Indonesia and operates a fleet of more than 300 locomotives that provide both freight and passenger services on the islands of Java and Sumatra. The company plans to upgrade and modernize the nation's rail infrastructure to better serve Indonesia's growing economy.

Meanwhile, KAI Commercial Director Bambang Eko Martono was quoted by The Jakarta Post as saying that the new locomotives will be used as freight trains in Java and Sumatra

?The locomotives will be used to transport coal in Sumatra and Java. Thirty nine will be located in Sumatra while the rest will be used in Java,? Bambang said, adding that the new locomotives were expected to be delivered in the third quarter of next year.

Around 42 percent of the firm?s revenue last year was derived from the passenger sector, while 39 percent was from transporting freight. Half of the revenue from freight came from transporting coal in South Sumatra, particularly for state-owned coal miner PT Bukit Asam.

The company is planning to increase freight contribution by more than 50 percent in the coming years, according to KAI?s corporate secretary Wiwik Widayanti. The firm has allocated Rp 7.2 trillion in investment from the fiscal year 2012 to 2014 to expand into the goods and container transportation businesses.

Editing by Reiner Simanjuntak