Rajawali to start railway operation in mid 2015
Tuesday, August 2 2011 - 04:08 AM WIB
?We have scheduled to complete final closing for administration this year. It will be followed by construction which will take 3.5 years and it is expected to start operation in middle of 2015,? said Rudiantara, chief executive officer (CEO) PT Bukit Asam Transpacific Railway (BATR), in an interview on Monday.
The 300 kilometer railway which will be integrated with coal operation of PT Bukit Asam Bangko, a unit of state miner PT Tambang Batubara Bukit Asam will need an investment of USD1.8 billion. The company will get financing from Bank of China, China Exim Bank, ICBC, and China Bank of Development. A Chinese construction firm will also handle engineering, procurement, dan construction (EPC) which will cost USD1.3 billion.
The firm is in talks with the four Chinese banks for their commitment to fund the project, Rudiantara said.
BATR is a 90-percent owned by Rajawali Asia Resources (RAR) while PT Bukit Asam has the remaining 10 percent. In the future, RAR will reduce its ownership to 60 percent, PTBA will own 30 percent while China Railway Engineering Corporation (CREC) will own 10%. PT Bukit Asam Bangko (BAB) is 65 percent owned by PTBA while RAR owns the remaining 35 percent. RAR is fully owned by Rajawali Corporation.
"We haven't received information about an option for PTBA to increase its ownership at BATR ,? said Darjoto Setyawan, Managing Director Mining & Resources Rajawali Corp, adding that the coal mine and the coal railway is an integrated project.
Previously, PTBA's President Director Sukrisno had said that the firm planned to increase its ownership at BATR to 30% in November 2011 from currently 10 percent.
Permits
Rudiantara said the firm has obtained principal railway permits from the transportation ministry on June 2011 on top of various other permits as required from 8 regional governments. "There are some permits from the regional governments that are being processed," said Rudiantara.
Rudiantara added BATR is in the process of completing acquiring land of 1 kilometer in length and 100 meters corridor width for a pilot project.
Speeding up
Rudiantara said the firm is currently focusing on speeding up production at the PT Bukit Asam Bangko to match the hauling capacity of BATR. Bukit Asam Bangko has 500 million coal deposit. BATR is planned to transport 25 million tonnes of coal per year.
PTBA signed an agreement with PT Transpacific Railway Infrastructure (TRI) which is now Rajawali Asia Resources (RAR) in 2008. Under the agreement, PTBA appoints RAR to develop an integrated railway system with a port facility as PT Bukit Asam wants to increase production from its mine in Tanjung Enim which has coal deposit of 1.5 billion tonnes.
PT BAB is also required to provide financing for development and exploitation as well as compensation of USD1.21 per tonne to PTBA for the duration of the agreement.
The project is also in the process of completing administration requirement including finding solution to its mining permit. PT Bukit Asam owns the mining permit on the mine while its unit BAB acts as a miner operator which is against the 2009 Coal and Mining Law. BAB needs to get its own mining license to mine the coal. "This has to be solved before the end of 2011," he said.
If the lincesing problem was not resolved, it may risk inflating the project costs which currently stands at around USD1.8 billion. "I don't know how significant the increase will be, but it will increase," said Darjoto.
Rudiantara added, it needs to resolve the licensing problem because it will also affect financing commitment process with the four Chinese banks. (*)