PTBA, partners get clearance to build $1b coal railway

IDX-listed coal mining firm PT Tambang Batubara Bukit Asam (PTBA) said on Wednesday that Ministry of Transportation has secured green light for the company and its partner to build a 307-km coal railway from its mine in Bangko Tengah in South Sumatra to Srengsem in Lampung province.

?With the issuance of the ?Principal Agreement? from the Ministry of Transportation, the project is now ready to be developed,? the company said.

The railway project, which will be able to transport 20 million tones of PTBA?s coal will be carried out by a JV company whose partners consisted of PTBA (10%), PT Transpacific Railway Infrastructure (80%) and China Railway Engineering Corp (CREC) (10%).

Based on 2007 FS, the project will cost the JV US$1.06 billion, 70% of which will be funded by loan.

CREC will be appointed as the project?s EPC contractor and operator and maintenance (O&M) company.

?The next step of the project is the formal appointment of CREC as EPC contractor which will be signed by year?s end, completion of technical planning, land acquisition and loan sourcing,? the company said.

The project is expected to become onstream in 2013.

PTBA?s Corporate Secretary Achmad Sudarto denied rumors that the Chinese partner is pulling out of the project. ?The JV members are fully committed to bring this project into completion,? he said. (denny)