Kalimantan coal railway operation should be under govt's control

The study made by the ministry of transportation has indicated that the planned construction of a railway network linking Central Kalimantan to East kalimantan would not only provide cheaper transportation for coal but also for passengers in the province.

But the study recommended the government to take a controlling stake in the 127-km project despite the involvement of both local and foreign investors.

"The construction of the Central Kalimantan to East kalimantan railway should become the main priority in the development of the transportation system in Kalimantan," said Soemino Eko Saputro, a senior official at the ministry, was quoted as saying by Bisnis Indonesia daily.

He, however, said that the government should have a controlling stake in the project which would cost about US$484.2 million to build, so that it would be able to control the railway operation. According to him, the government's control is important to ensure that the tariffs for the railway system would not be too expensive both for coal producers or the public.

Eko said that in order to be able to control the railway operation, the government should provide at least 65 percent of the construction costs. Other 35 percent of the total costs could come from private investors.

The construction of the Central Kalimantan to East kalimantan railway is part of the master plan to build Kalimanan Coal Transport (KCT) system in Kalimantan. The railway will be able to transport between 18.5 million tons and 20 million tons of coal a year. (*)