PT KAI to raise coal transportation tariffs to cover operating costs

State owned railway operator PT Kereta Api Indonesia (KAI) plans to raise the tariff for the transportation of PT Bukit Asam?s coal from its mining site in Tanjung Enim, South Sumatra to Merak, West Java in its efforts to meet surging operating costs, Media Indonesia reported on Wednesday.

Marketing director of the railway operator Juda Sitepu said in Jakarta on Tuesday that the current tariff of Rp 25,000 (US$=Rp 8,500) per ton could no longer meet the operating costs. "The current tariff is still far below the operating costs," he added.

PT KAI has been reported to have reduced the number of railway coaches to transport PT Bukit Asam?s coal to 40 from 46 previously due to the worsening its railway tracks. Many parts of the railway tracks need replacement.

Under the existing contract, PT KAI is required to transport 10 million tons of coal from Tanjung Enim to Tarahan coal terminal in Panjang, Lampung a year. The coal is then shipped from the coal terminal to Suralaya power plant in Merak, West Java. However, the realization of the coal transportation only reaches about seven million tons.

According to a survey made by Canadian Pacific Consulting Service in 1983, the tariff of the coal transportation should be about 172 percent of the coal price to enable PT KIA to cover the operation costs. It means that the transportation tariff should be doubled to about Rp 50,000 per ton from the current Rp 25,000 per ton. (*)