PTBA says S. Sumatra coal railway project needs $4.8 billion of funds

Indonesia-listed coal miner PT Tambang Batubara Bukit Asam (PTBA) said on Tuesday that the total cost for the construction of a 307-kilometer railway connecting (PTBA)?s mining area in Bangko Tengah, South Sumatra to Srengsem area in Lampung reached US$4.8 billion, much higher compared to the $1.5 billion figure stated in a previous statement.

PTBA?s president director Sukrisno said 80 percent of the total coast or about $3.84 billion will be financed by its majority stakeholder partner PT Rajawali Group and the remaining will come from PTBA and other partner, China Railway Engineering Corporation, with 10 percent each.

The consortium has formed a joint venture firm called PT Bukit Asam TransPacific Railway (BATR) consisting of PT Bukit Asam (Persero) with a share ownership of 10 percent, PT Rajawali Group (80 Percent) and China Railway Engineering Corporation, or CREC (10 percent).

PTBA has an option to increase the stake in the JV firm to 30 percent from 10 percent currently.

Up to date, BATR is to complete the detail design of the project and it expected it to be completed by the end of this year, after which BATR will conduct land clearance, he said.

In April statement, PTBA?s corporate secretary Achmad Sudarto told Petromindo.com that the consortium comprised ICBC China, the Bank of China, Exim Bank and China Development Bank will provide about $1.05 billion or about 70 percent of the total $1.5 billion funds needed for the construction of the railway. The other 30 percent or about $450 million would be provided by PTBA, Rajawali Group and China Railway.

PTBA said that the project is expected to start construction at the end of this year or early 2011 at the latest. The railway is scheduled to start operation in mid or end of 2014 and will be able to transport 25 million tons of PTBA?s coal per year. (godang)