Indonesia’s INKA Joins Thai’s Thanakorn, SRT Build Railways Project US$3.63B

Photo by PT INKA

JAKARTA (TheInsiderStories) – Indonesian state-owned fully integrated rolling stock manufacturer PT Industri Kereta Api (INKA) says it wants to strengthen its foothold in Southeast Asia by participating in the many railway mega projects in Thailand and other countries.

INKA itself has a target to be able to control the carrier market in Southeast Asia in 2020 after that new targeted to other Asian countries such as Bangladesh, Sri Lanka, and the Philippines.

INKA joined with Thanakorn Co. Ltd and the State Railway of Thailand (SRT) set up a join venture company INKA Thailand Co, to handle Thai government’s mega projects seven double-track railways spanning 933 kilometers worth a combined 113.66 billion baht (US$3.63 billion).

Thanakorn owns a 59 percent stake in the local firm, while INKA holds the remaining shares.

Chief Executive of Thanakorn, Thananot Thunyaphongphaiboon said in a press statement on Monday (28/05), the partnership also covers both parties’s presence in Laos, Cambodia, Vietnam, and Myanmar. The company expects support from INKA in locomotive procurement, technology transfer, as well as capacity building in the railway industry.

President Director of INKA, Budi Noviantoro, said that the cooperation between Thanakorn, SRT and INKA is in the form of 150 locomotives starting from 50 locomotive contracts in 2018. Thailand is now building a railway industry.

INKA is ready to bid on the procurement of 100 diesel-electric locomotives and a lease agreement for 50 locomotives, worth 6.2 billion baht. This project has been submitted to the SRT board for acknowledgment.

The project also aims to provide the extra locomotives to deal with several double-track railways that are set to be completed over the next few years. In the past, INKA won the SRT procurement contract to ship 70 and 20 units of ballast hopper wagons in 1998 and 2000.

Yesterday, INKA has signed a contract for purchasing four unit Diesel Multiple Train set with Philippine Railway railway for $21.4 million, as well as the purchase of three locomotives and 15 passenger trains worth $26.1 million.

Delivery on Jan. 18 and May 27, 2020. Previously, on Jan. 22 the two sides have also signed a contract of sale and purchase of two train set valued at $9.7 million.

This cooperation project is the initiation of the Philippine government to provide a reliable means of public transportation, shorten the distance, and more comfortable for the community. The plan of the railway will be operated on the route connecting Tutuban Station and Alabang Station in Metro Manila.

To support the expansion of the export market, INKA immediately realized the construction of its second plant in Banyuwangi, East Java with an investment of Rp600 billion ($42.55 million). The financing is allocated from the capital injection from government Rp 1 trillion received by the company in the 2016 State budget.

INKA plan to construct the new plant in this year and early 2019 is ready to produce. The main factory of the company located in Madiun also in east Java, while factory in Banyuwangi earmarked for aluminum and stainless steel trains.

As South East Asian Nations are marching toward integration of their economies through the ASEAN Economic Community, lot of the companies set up a collaborations to realized the program. In the past seven years or so, ASEAN Exchanges have taken a number of initiatives as a joint asset class for retail and global institutional investors.

US$1: 31.90 Baht, 52.54 Philippine Piso and Rp14.100