PT BATR, China Railway sign $4.8b contracts to develop railway in South Sumatra

PT Bukit Asam TransPacific Railway (BATR) and China Railway Group Limited have signed a US$4.8 billion contracts of engineering, procurement, and construction (EPC) and Operator & Maintainance (O&M) to develop a 307 km railway transportation and a coal port with a capacity of 27 million tons per year.

The company said on its press release on Thursday that they had signed the contracts on March 23, 2010 . The total value of the EPC contract is US$1.3 billion for four years since its signing, while the O&M contract is US$3.5 billion for 20 years. It said that of the total funds, 30 percent will be sourced from the companies? own capital and the other 70 percent will be loans provided by four Chinese banks.

The railway facility, which is scheduled to start operation in 2014, will be used to transport coal from state owned PT Bukit Asam?s (PTBA) mining site in Banko Tengah, Tanjung Enim, South Sumatra province, to Srengsem in Lampung province. The railway project has secured a principle permission for development from the ministry of transportation on October last year..

BATR is a joint venture between PT Bukit Asam (Persero) with a share ownership of 10 percent, PT Transpacific Railway Infrastructure (80 Percent) and China Railway Engineering Corporation (10 percent).

The China Railway Group Limited is 100 percent owned by China Railway Engineering Corporation (CREC). (Benget)