PTBA reviews Tanjung Enim-Tarakan coal railway project

State owned coal mining company PT Tambang Batubara Bukit Asam Tbk (PTBA) and its Chinese partner are reviewing the 307-km railway project connecting Tanjung Enim with its shipment terminal in Tarakan, Lampung.

The company?s president director Sukrisno said in Jakarta on Thursday that the increase in prices of steel and construction had forced the coal producer and its partner to review the Tanjung Enim-Tarakan coal railroad project.

He said that the review might result in the increase in the value of the project as an adjustment to the price increase.

?The feasibility of the project was made in 2006. So, it is fair that if there is an increase in the value of the project,? he added.

The railway project, which will be able to transport 20 million tones of PTBA?s coal will be developed by a joint venture (JV) comprising of PTBA (10%), PT Transpacific Railway Infrastructure (80%) and China Railway Engineering Corp (CREC) (10%).

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

CREC will act as EPC contractor and operator and maintenance (O&M) company.

Sukrisno said that the project would continue despite the rise in its value. ?There is no problem with the rise in the cost as long as it is fair,? he added. (*)