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Government plans to build national railway network
The Jakarta Post , Jakarta | Wed, 09/20/2006 9:08 AM
M. Taufiqurrahman, The Jakarta Post, Jakarta
The government plans to build a railway network on the country's major islands to help speed economic development, a minister says.
Transportation Minister Hatta Rajasa said in a hearing with House of Representatives Commission V on transportation and public works that the project would include the expansion of existing networks in Java and Sumatra and the construction of new ones in Kalimantan, Sulawesi and parts of Papua.
Hatta said some of the projects were already underway in Java and Sumatra.
""In Sumatra, our projects will focus on the improvement of railway networks to support the transportation of coal and other export commodities,"" Hatta said, adding that in Java the project included the expansion of railway networks in greater Jakarta.
Next would be the construction of a 500-kilometer railway network to link major cities in Kalimantan.
Hatta said that for the project in Kalimantan and the eastern parts of the country, the government would award contracts to private companies.
""According to our estimates, every kilometer of the network will cost Rp 14 billion to build, and there is no way the state budget will be able to cover it,"" Hatta said.
Hatta earlier said the cost of improving the country's railway network would be as high as Rp 11.6 trillion (US$1.2 billion), far beyond the government's ability to pay.
He said he believed the tender for the projects could be held soon after the amendment of the law on railways.
The amendment of the 1992 Railway Law is expected to open the door to privatization of the nation's railway service, which has long been highly regulated.
The law stipulates that the government is obligated to provide railway infrastructure, including tracks, stations and signaling, as well as operate the entire system. It effectively grants state railway company PT KAI monopoly status.
Privatization would include selling the Greater Jakarta unit of PT KAI to private investors. The unit has seen several train accidents over the last two years.
The plan, however, may well be scrapped because of opposition from some state officials.
State Minister for State Enterprises Sugiharto recently said that the railway scheme was just talk and would be difficult to execute given the complexity of the issues involved.
Backers of privatization argue much of the opposition arises from narrow-minded nationalism.
Railway privatization has also been hampered by the sluggish deliberation of the railway law amendment, which has been going on for more than two years.
Commission V members said in a statement that they should be kept informed about the design of the planned national rail network, so that its implementation could be subject to House scrutiny.
