PTBA, KAI agree on draft agreement to build coal railway

PT Tambang Batubara Bukit Asam (PTBA) and state railway operator PT Kereta Api Indonesia (KAI) agreed on the draft agreement to build coal railway network worth Rp 3.5 trillion (1US$=Rp 9,400) in South Sumatra, Bisnis Indonesia reported on Wednesday.

 

The project aims at increasing supply coal from Muara Enim to Tarahan coal terminal (Lampung) and from Tanjung Enim to Kertapati ( South Sumatra ) as well as shorten the transport lane to 316 km from 416 km.

 

Financial Director of KAI Ahmad Kuncoro said in Jakarta on Tuesday that his company and PTBA would set up a joint venture wherein KAI would become majority shareholder.

 

KAI would own a minimum of 70% of the corporate shares but it does not close possibility to increase the share ownership to 90%, he said.

 

KAI would issue bonds minimally worth Rp 500 million next year to follow up the agreement. The project is expected to boost coal transportation to around 10-12 million tons from 8 million currently. (*)