State-owned railway company PT Kereta Api Indonesia (KAI) says that it will invest up to Rp 3.4 trillion (US$350 million) this year to maintain facilities and rail infrastructure, as well as to expand its freight train business.

Half of the investment, or Rp 1.7 trillion, will be used to maintain its existing fleet of locomotives and railway infrastructure. The investments will be financed solely from the 2013 State Budget, president director Ignasius Jonan told lawmakers from Commission XI overseeing economy and finance, in a hearing on Monday.

Meanwhile, the remaining Rp 1.7 trillion, which will be raised through bank loans, will be used for new investments. KAI plans to expand railway facilities in Sumatra, as well as in Greater Jakarta.

Of the allotted money for the new investments, Rp 480 billion will be used to expand KAI’s coal transporting business in Sumatra.

“We are trying to increase the capacity of our freight trains. We are seeing that there is an upward trend [for demand of freight trains],” Ignasius told lawmakers.

This year, KAI plans to boost its annual freight transportation capacity to 31 million ton, a 40 percent increase from 2012. More than a half of the cargo transported, or 19 million, will come in the form of coal.

The increased capacity will contribute to a revenue boost for KAI from its freight business, which is expected to top Rp 3.6 trillion this year. In 2012, the state railway company reaped Rp 2.5 trillion in revenues.

Other new investments include multiyear projects amounting to Rp 491 billion for the expansion of train facilities in Greater Jakarta, as well as Rp 56 billion for the construction of a railway connecting Jakarta to Soekarno-Hatta International Airport.

The new railway, which will span 12 kilometers from Batu Ceper train station in Tangerang, Banten, to the airport, is expected to be completed by the end of this year, according to Ignasius.

Passengers could board the train from train stations in Manggarai, Sudirman and Batu Ceper, the president director said. “We will revitalize the stations and expand them,” he added.

The estimated travelling time from Manggarai to Soekarno-Hatta is 54 minutes, with KAI operating 62 train trips on the route every day. KAI targets annual passengers to top 6.6 million by the time the airport train fully operates in 2014, expecting them to reach 7.8 million in 2016, according to the president director.

Soekarno-Hatta airport is currently operating well above its capacity, with passenger traffic through the country’s main airport currently standing at 51.1 million per year, exceeding its maximum capacity of 22 million.

KAI said net profits in 2012 reached Rp 385 billion, a figure that was described by House of Representatives’ Commission XI deputy chairman A. Timo Pangerang as “relatively small”, although she praised Ignasius’ leadership in transforming KAI and conducting various reforms in the company. The state-run railway company targeted profits to reach Rp 468 billion in 2013.

KAI transported 202.7 million people throughout 2012, a 5 percent increase from a year earlier. Passengers topped 207 million in 2009, although Ignasius claimed the decline was compensated by the improvement in “service quality”, as KAI had moved to prioritize passengers’ safety and comfort during his leadership.

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