Govt to sign railway deal with Sam-An
Govt to sign railway deal with Sam-An
Rendi A. Witular, The Jakarta Post, Jakarta
The government will sign a US$270 million investment deal with
South Korean engineering company Sam-An Corp. next month to help
modernize the railway system in Greater Jakarta.
Minister for Transportation Hatta Radjasa said before meeting
with President Susilo Bambang Yudhoyono on Wednesday that Sam-An
would reorganize and manage the railway system around and leading
into the capital for more than 15 years.
"The ministry has issued a license for Sam-An to reorganize
and manage the railway. We expect the company to materialize
their investment next month," he said, adding that the
revitalization work would be completed by 2008.
The company will provide about 300 new train cars, dozens of
new train stations as well as a ticketing system that will
minimize the number of passengers riding trains without
purchasing a ticket.
It is estimated that half of the approximately 450,000
passengers who use the railway system in Greater Jakarta each day
do not purchase tickets due to a lack of enforcement by officials
from ailing state railway operator PT KAI.
Hatta said Sam-An would take over the operation of the Greater
Jakarta railway system from KAI under a kind of build-and-
transfer mechanism.
Dow Jones reported late last month that Sam-An was first asked
by the Jakarta administration to conduct studies on upgrading the
railway system in 2003, and the government indicated its
intention to allow the South Korean company to go ahead with the
project.
Sam-An specializes in the design and construction of
hydropower dam facilities, seaports and transportation and
traffic systems. The company has participated in constructing
South Korea's subway system and railroads, including a high-speed
railway.
Regarding a plan to spin off KAI's Greater Jakarta unit, Hatta
said his ministry and the Office of the State Minister for State
Enterprises were currently working on the plan and expected it to
be finished next month.
"Aside from spinning off the unit, the government is also
working to revise the law on railways to facilitate the greater
involvement of the private sector. Private investors will
eventually control the Jakarta train system as well as railways
in other areas," said Hatta.