Railway firm cuts PTBA?s coal transportation volume

State railway company KAI had cut coal volume transported from state coal mining firm PT. Tambang Batubara Bukit Asam's (PTBA) Tanjung Enim mine to Tarahan coal port in Lampung by 70 percent since last week, Kompas daily reported Tuesday.

Coal transported by KAI railway system currently run at 6,400 tons per day, far lower than normal volume of 20,000 tons-24,000 tons daily, a KAI official said.

KAI is the transportation backbone of PTBA, which has contract obligation to supply 6.5 million tons of coal annually to 3, 400-MW Suralaya Power Plant,located in the province of Banten.

If the decline continues, coal supply to Suralaya could be affected, thus putting Java power supply continuity at risk, a Suralaya company official said. Suralaya is the main electricity source for the power transmission in Java and Bali.

The official, however, said, thus far it had still enough coal stock to ensure the power plant?s operations.

The KAI official said the volume decline was due to poor quality of the trains, but source said KAI was slowing down because it was not satisfied with transportation fee arrangement forced by the ministry of state enterprises, which oversees both PTBA and KAI.

The government had set coal transportation fee from Tanjung Enim to Tarahan at Rp. 37,000 (US$ = Rp. 8,900) per ton on condition that KAI transported at least 8.5 million tons of coal annually. If KAI fails to transport the minimum volume, it would receive lower fee. The railway company is demanding Rp. 45,000 per ton and less strict volume requirement condition.

PTBA relies on the state owned railway operation in transporting its coal from its Tanjung Enim mining site. Most of the company?s coal is transported by trains to a coal terminal in Tarahan, Lampung before being shipped to buyers including state electricity company PLN?s subsidiary Suralaya power plant. (*)