Land acquisition for East Kalimantan railway project to start next month

By Hiski Darmayana

Authorities in East Kalimantan will soon start acquiring lands for the coal railway project which is designed to stretch from Kutai Barat regency to the seaport of Balikpapan city.

East Kalimantan?s Governor Awang Faroek Ishak told Petromindo.com that the land acquisition program will start in December or next month.

?All the leaders of the affected areas, namely the regents of Kutai Barat, Kutai Kartanegara, Paser Penajam Utara and the mayor of Balikpapan, have established a team involving all related agencies with the task of carrying out the land acquisition,. The project is very important for the connectivity of all the areas,? he said.

Awang projected the land acquisition will be completed within eight months.

?As for the schedule for the start of the construction, it depends on the developer of the project. Our target is that the railway will start operation in 2015,? he said.

The project will be developed by Russian firm JSC Russian Railways based on the Memorandum of Understanding (MoU) signed in February 2012 by Awang and Andrey Shigaev, a director at Kalimantan Rail Pte. Ltd, which is thesubsidiary of Russian Railway.

The Kutai Barat-Balikpapan 191 km line is the first phase of the railroad to be developed by the Russian firm in Kalimantan. In the second phase, it will build another 60-km railroad connecting the Murung Raya regency in Central Kalimantan to the Kutai Barat-Balikpapan line.

All the projects are estimated to cost US$2.4 billion, including $1.8 billion for the Kutai Barat-Balikpapan line. The projects will be funded by private investors and Russian state development bank Vnesheconombank. The railway, if completed, will play a crucial role in transporting commodities, particularly coal, from East and Central Kalimantan?s hinterland to the seaport of Balikpapan. The railway will be able to transport 20 million tons of coal annually in the first phase, according to Shigaev.

Editing by Johannes Simbolon