JAKARTA (TheInsiderStories) - State owned railway operator PT Kereta Api Indonesia (KAI) sets investment of Rp8 trillion (US$579.71 million) to increase the freight transport business and freight transportation in 2016, Chief Executive Officer (CEO) of KAI Edi Sukmoro said Thursday (Jan 7).
One of the largest project to be built by KAI this year is the double track railway for coal, palm oil and rubber from Muara Enim to Special Economic Zone (SEZ) of Tanjung Api-Api and its seaport in South Sumatera. The company will team up with other parties to carry out the projects.
Based on data from the National Investment Coordinating Board (BKPM), the double railway track project will cost around $2.97 billion, while the monorail project at SEZ of Tanjung Api Api will cost around $550 million. Currently, several investors from China, Russia, Japan, South Korea, Malaysia, Singapore and France have showed their interest to finance the projects.
The railway projects will also support the development of the largest pulp and paper factory in Southeast Asia, PT OKI Pulp & Paper in Ogan Komering Ilir in South Sumatera with total cost Rp32 trillion to be operational in 2016.
Other projects to be developed by KAI, Edi said, are the airport railways , which will be developed jointly with the state owned airport operators, namely PT Angkasa Pura (AP) I and AP II as well as state construction firm PT Waskita Karya Tbk (IDX: WSKT). The airport railway networks will be developed at airports managed by AP I such as the Juanda airport in East Java, Sultan Hasanuddin airport in South Sulawesi, Adi Soemarmo airport in Central Java and Yogyakarta’s upcoming airport in Kulonprogo.
KAI will also take part in the Jakarta-Bandung high-speed railway (HSR), led by construction firm PT Wijaya Karya Tbk (IDX: WIKA) and medium speed railway from Jakarta to Surabaya in East Java. President Joko Widodo expects the construction of the $5.5 billion high speed train project to kick off on Jan. 21.
The Jakarta-Bandung HSR will be developed by PT Kereta Cepat Indonesia China, which is a joint venture between Indonesian state firms PT Wijaya Karya, KAI, PT Jasa Marga Tbk (JSMR), PT Perkebunan Nasional VIII and the China Railway International Co. Ltd.
The high-speed train, which will run at over 250 kilometers per hour on a 140-kilometer long track, will begin construction in 2016 and is slated to be finished by the end of 2018.
KAI will also developed light rapid transportation (LRT) in cooperation with other state owned companies, which will be led by PT Adhi Karya Tbk (ADHI) in greater Jakarta areas. The consortium will also develop the Sulawesi Railway project.
This year, KAI is targeting to post revenues of Rp20 trillion, compared to around Rp15.5 trillion in 2015 or up 29 percent. KAI also aims to bring 72.3 million passengers in 2016 from last year 68.54 million and freight transport business 62.92 million tonnes from 2015 29.65 million tonnes. (*)