South Korea's Sam-An Corp. may sign RI train deal in July
South Korea's Sam-An Corp. may sign RI train deal in July
Dow Jones, Seoul
South Korea's Sam-An Corp. expects to sign an agreement with the Indonesian government next month to provide consulting services and help modernize Jakarta's train system, a project that could be valued at up to US$300 million, the company's top executive said.
Under the plan, Sam-An will design and organize a plan to improve the train system in and around the city of Jakarta, the engineering consulting firm's President Lim Jong-Ah told Dow Jones in a recent interview.
The Indonesian government plans to finalize the upgrade of the train system by 2008. The project will include improvement and construction of railways and station facilities.
Sam-An was first asked by the city of Jakarta to conduct studies on the upgrade in 2003 and the Indonesian government indicated in a letter earlier this year its intention to allow the South Korean company to go ahead with the project.
"As Indonesian government officials are pushing hard to materialize this project, we expect to sign a memorandum of understanding with the transportation ministry in July and a final agreement is expected to be reached by the end of 2005," said Lim.
Sam-An will serve as the construction manager and coordinate all processes including financing, he said.
Sam-An plans to improve the traffic system of the crowded city by rearranging Jakarta's existing railway connection.
"The renovation will only cost 1/13 of the amount estimated for constructing a new line. We expect this project will also lead to the development of neighborhoods surrounding the renovated stations," said Lim.
To meet increasing traffic demand, Indonesia may consider importing South Korea's used trains, he added.
The Indonesian government and Sam-An haven't yet determined how they will arrange financing for the project, but Lim said his company plans to arrange project financing from international investors, including South Korean investors.
"The Indonesia train deal will become a milestone for Sam-An as it will be our first overseas consulting project. Using our expertise in the infrastructure business in South Korea, we will tap into other developing countries like China, Cambodia and Vietnam," Lim said.
Sam-An, formerly known as Sam-An Engineering Consultants, specializes in design and planning of hydropower and dam facilities, port development, transportation and traffic systems. It has about 1,000 employees and in 2004, posted a net profit of 7.5 billion won on revenue of 141.4 billion won.
The unlisted company has participated in construction planning projects for South Korea's subway lines and railroads including the country's high-speed railway.