The State-Owned Enterprises Ministry has ordered mining giant PT Bukit Asam (PTBA) to drop a plan to build a railway line in Sumatra with local and Chinese partners.
Minister Mustafa Abubakar said Friday the planned joint venture with PT Transpacific Railway Infrastructure (TRI) and China Railway Engineering Corporation (CREC) was “marred with financial
difficulties”.
“We expect the new partner will minimize the huge budget needed and will resume the project,” Mustafa said, adding there were already several companies waiting in the wings to team up with PTBA on the project, including one from China.
Under the planned partnership — to build a 390-kilometer railway line from PTBA’s mine in Tanjung Enim, South Sumatra, to Pelabuhan Baru, Lampung — PTBA was to have held a 10 percent stake, TRI 80 percent and CREC 10 percent.
In August 2008, PTBA injected Rp 910 million in the joint venture to claim its 10 percent.
The consortium had since 2008 obtained letters of recommendation from the governors of South Sumatra and Lampung, as well as principal permits from the Transportation Ministry in 2009, and was currently reviewing the engineering and procurement drafts and the construction contract.
PTBA president director Sukrisno previously said he was upbeat about the joint venture with TRI and CREC taking off.
“PTBA is calculating the budget needed,” he said.
“We expect to finance it with our internal cash flow.”
The company is seeking to augment its existing railway infrastructure to boost coal distribution.
It currently relies on state railway operator PT Kereta Api to distribute its coal.
From its mines in Tanjung Enim, PTBA shifts 20 million tons of coal a year to the Tarahan coal terminal in Lampung, and 2.7 million tons a year to Kertapati.
PTBA, which controls a quarter of Indonesia’s coal reserves, is targeting coal output of 14 million
tons this year, up from 11.6 million tons in 2009.
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