State railway firm looks for investors to boost coal transport capacity

State railway company PT. Kereta Api Indonesia (KAI) is looking for investor(s) to help the company to raise South Sumatra coal railway capacity to enable the company to transport 12 million tones of coal annually.

Bisnis Indonesia Daily quoted the company?s president Ronny Wahyudi as saying that a US$110 million investment would be needed to boost coal transport capacity from around 8 MTPA currently to 12 MTPA in 2009.

Curently KAI only customer is state coal mining firm PT. Tambang Batubara Bukit Asam (PTBA), which transport its coal from Tanjung Enim mine in South Sumatra to Tarahan in Lampung (7 MTPA) and to Kertapati, also in South Sumatra (1.2MTPA).

Wahyudi said currently KAI is in talks with a number of potential investors including PTBA.

PTBA?s plan to increase production is constrained by railway capacity. It only manages to produce around 10 MTPA for the past few years, around 70 percent of which, goes to PLN?s Suralaya power plant in Banten province. (*)