Talks between PT BA and PT KA on coal transportation tariffs deadlocked

Negotiations in new coal transportation tariffs between state-owned railway operator PT Kereta Api (KA) and state owned coal producer PT Batu Bara Bukit Asam (PT BA) were deadlocked as both companies were still divided about the percentage of the increase, Bisnis Indonesia reported on Thursday.

PT KA?s president Omar Berto acknowledged on Wednesday that the problem had been brought to the office of State Minister for State Owned Enterprises as negotiations between the two companies failed to solve the difference.

"We hope, the new tariff could be decided within this month," he was quoted as saying by the newspaper. He added that PT BA?s main buyers such as state owned electricity company PLN and its subsidiary Indonesia Power were also involved in the negotiation.

PT KA which transports PT BA?s coal from the latter?s mining site in Tanjung Enim, South Sumatra to coal terminal in Tarahan, Lampung before being shipped to Indonesia Power?s Suralaya power plant near Merak, West Java, currently charges the coal producer between Rp 25,000 (US$=Rp9,000) to Rp 29,500 per ton.

The railway operator demanded an increase in the coal transportation tariff to Rp 45,000 per ton but PT BA said that the company was only able to increase the tariff to Rp 35,000 per ton. According to PT KA the current tariff is not enough to cover the company?s operating costs, while PT BA said that the new tariff would cause the company to suffer a loss if there is no increase in the price coal sold to Indonesia Power? power plant.(*)