French firm plans to develop railroads in Aceh, Surabaya
Rendi A. Witular, The Jakarta Post, Jakarta
As the government has been concentrating on further developing the rail network on Java, French rail company SNCF International plans to restore the network connecting Banda Aceh and Medan, as well to explore a possibility of a commuter line in Surabaya.
As a token of its seriousness, SNCF chairman and chief executive officer Jean-Pierre Loubinoux signed a memorandum of understanding with Minister of Transportation Hatta Radjasa on Tuesday to conduct a technical and feasibility study for the projects.
The study will be funded by the French government in the form of grants worth about 1 million euros for each project.
"We are eager to open up a railway business in Indonesia. After the completion of the study, we will invite other investors to become partners with us on the project," Loubinoux told a press briefing on Tuesday at the two-day Infrastructure Summit.
On the Aceh rail project, he added, the company would focus on restoring the 400-kilometer network stretching from Banda Aceh to Medan. The railroad itself, built by the Dutch colonial administration, actually survived the Dec. 26 quake and tsunami, that killed over 100,000 people in Aceh and devastated most of infrastructure.
In 1999, president B.J. Habibie kicked off a Rp 3.5 trillion (about US$377 million) railway project connecting Banda Aceh and Langsa in southeastern Aceh with Asian Development Bank assistance in conducting a feasibility study for the project.
The technical and feasibility studies for the Aceh railway project are expected to be completed within six months while for the Surabaya project is to be completed by the end of this year due to the complexity of the areas.
SNCF was established 50 years ago from a merger between several French state rail companies with a number of private firms.
The company has been involved in a number of projects in Asia, including Taiwan and South Korea.
SNCF refused to disclose the amount of the projects but an official with the transportation ministry revealed that the investment could be around $1 billion.
Data from the ministry says there are currently 7,833 kilometers of rail networks available in the country but only some 4,411 kilometers are operational. Over 3,100 kilometers are in Java and over 1,200 kilometers are in Sumatra.
Coordinating Minister for the Economy Aburizal Bakrie said the policy of expanding the railway network in Sumatra was to serve all provinces and other potential regions by improving the existing infrastructure system and setting up new networks.
The government is currently drafting a bill on railroads, which will further enhance the role of local administrations and the private sectors to help develop the facilities.
At present, PT Kereta Api Indonesia (KAI) has a monopoly to regulate and operate the nation's rail networks, but has come under criticism for financial difficulties faced by the company due to corruption.
Due to the lack of funds, the company has only been able to grow by an average of 2.55 percent per year in terms of providing new facilities and expanding the network.