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Kereta Api eyes new locomotives
PT Kereta Api Indonesia inked Tuesday a preliminary deal with US business giant General Electric (GE), which could see the state railway operator purchase 20 new locomotives and lease a further 150 as part of its ongoing revitalization program
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T Kereta Api Indonesia inked Tuesday a preliminary deal with US business giant General Electric (GE), which could see the state railway operator purchase 20 new locomotives and lease a further 150 as part of its ongoing revitalization program.
Kereta Api president director Ignasius Jonan said the two companies would further negotiate and conduct assessments before the actual purchasing and leasing agreement, scheduled for no later than September, is signed.
Ignasius did not disclose how much the deal was worth, but said the company has earmarked between US$300 million and $400 million to finance its plans to add between 150 and 200 new locomotives in the next three years as part of the revitalization of the company.
"Most of our locomotive products came from GE, and now we're trying to explore further cooperation. If everything fits, then we'll actually conduct the transaction," he said after the signing of the preliminary deal with president and CEO of GE Transportation, Lorenzo Simonelli, in Bandung, West Java.
If the deal comes to fruition, the new locomotives will support the company's coal transportation business in South Sumatra - in particular along the Tebing Tinggi-Rantau Prapat line - and help increase container traffic to and from Bandung and Cirebon in West Java, as well as Surabaya, East Java.
According to Ignasius, the new locomotives will be designed to run on biodiesel, which would be produced by the company, in line with the company's plan to increase the use of biodiesel to 25 percent of its total fuels by 2025. Biodiesel currently accounts for 10 percent of the company's fuel.
Meanwhile, Simonelli told reporters that while most of the locomotives would be built GE's factory in Erie, Pennsylvania, and that final touches would be done by state owned train manufacturer PT Industri Kereta Api (Inka).
"The locomotive has the best technologies with reduced costs and emissions, with world class quality. It is a proven locomotive that will be very productive for Indonesian railways," Simonelli said.
