Russian Railways to build $2.4 billion rail project in Indonesia
7 February 2012State-owned Joint Stock Company (JSC) Russian Railways has entered into an agreement with the Indonesian Government to build a railway link in the country, which will entail an investment of $2.4 billion.
The pipeline rail project will be developed in the East Kalimantan province of the Borneo island of Indonesia and will be used for coal transportation in its initial phase. The rail link at the later stage will be used to transport crude palm oil, plantation harvests, rubber and people. The new rail link is aimed at assisting improvement of decrepit infrastructure on the island. The construction has been staged in two phases. In Phase I, a 185km railway link will be established which will connect an area close to the Balikpapan port to to Kutai Barat regency in East Kalimantan. In phase II, the 185km line will be boosted by another 60km rail link which will establish a link between Kutai Barat regency and Murung Raya regency in Central Kalimantan. Phase I is estimated to cost approximately $1.7 billion and will transport approximately 20 million tonnes of coal per year. The project will be financed by private investors and Russian state development bank Vnesheconombank. The company anticipates to begin construction in 2013 and commence operations on the new line in the first quarter of 2017.
