In the second announcement on major coal-railway projects in as many days, Central Kalimantan’s top official said on Friday that the proposed 185-kilometer rail line linking Puruk Cahu and Bangkuang - expected to cost $1.5 billion - will be put out to tender before the end of the year.
It is hoped that construction of the rail line will help maximize coal production in the province, which is estimated to hold 4.8 million tons of the fuel, representing more than a half of the country’s total estimated deposits of about seven million tons. The project is expected to be finished in 2012.
The province’s coal is in high demand due to its high calorific value and low ash and sulphur levels.
“We see a railway as the only feasible option for transporting coal throughout the year,” said Agustin Teras Narang, the governor of Central Kalimantan.
“Coal from the area is currently transported by road and river. But the roads are only able to support trucks carrying up to eight tons, while river transportation is impossible during the dry season, even for small barges.”
The project is currently at the pre-tender stage, with input being sought from potential investors. Agustin said the railway would be developed as a public-private partnership scheme, with the line being constructed by private investors who would be given a concession to operate it for 30 years.
“Apart from the 30-year concession, we are also guaranteeing that all coal transported from the area will have to be carried by rail,” Agustin said, adding that this would ensure that local roads were not completely clogged or destroyed by coal trucks.
Residents have long complained about damage and congestion affecting the province’s roads, due to endless lines of coal trucks operating 24 hours a day.
Dedi S Priatna, the deputy for infrastructure at the National Development Planning Board (Bappenas) in Jakarta, said the line was expected to carry 10 million tons per annum during the first 10 years of its operation.
This is expected to later increase to 20 million tons, meaning that about 500 million tons of coal will be transported by the railway over the course of the 30-year concession.
“The local government will only be involved in the land acquisition work, but that will be enough to give us a 15 to 25 percent share of the project,” Agustin said.
“The land acquisition process is currently underway and I expect it to be finished by the end of the year. Construction work on the project will then be able to start next year.”
The Puruk Cahu-Bangkuang railway line is the first of four proposed additional sections of rail stretching approximately 1,829 kilometers across the province to connect coal mines and ports.