Jakarta (ANTARA News) - Two South Korean companies signed an agreement with an Indonesian state firm Monday to build a railway line in Borneo in a deal worth one billion dollars, a report here said.
South Korea's POSCO and Canatect Ltd signed a memorandum of understanding with PT Kereta Api Indonesia, according to Detikcom news portal.
Indonesian Transport Minister Hatta Radjasa was quoted saying the railway line would be built in east Kalimantan, the Indonesian part of Borneo island.
No further details were available and a transport ministry spokesman declined comment.
The reported deal comes on the first day of a visit here by a large South Korean delegation made up of business leaders and government officials to follow up on an agreement to forge a strategic partnership between the two countries.
The agreement was reached during South Korean President Roh Moo-Hyun's visit to Indonesia in December.
Radjasa was quoted saying Monday's deal was the second since a new transport law was enacted, allowing the private sector to play a greater role in the development and operation of railways in Indonesia.
A Japanese consortia qualified this month to bid for a railway project in West Java at a cost of about 660 million dollars. (*)