Central Kalimantan Governor, Agustin Teras Narang, said that the planned development of the railway track in the province will commence in May this year. The track, which is to be the first railway track in Kalimantan, will facilitate coal transportation from the northern part of the province directly to the seaport.
According to the Governor, Japanese company Itochu Corp. will be investing Rp7.6 trillion (about US$710 million) to finance the project. The company will be granted the right to operate the track for a period of 30 years after the project is completed.
The first phase of the project consists of a 185 km track originating from Murung Raya Regency to the South Barito Regency. And the second phase, which is expected to be completed in 2012, will pass the provincial capital Palangkaraya and connect the track to the seaport, spanning a length of about 700 km. Upon completion, the entire track is expected to support an annual transport capacity of about 20 million metric tons of coal.
Previously, South Korean companies Posco Co. Ltd. and Canatect Co. Ltd., which had planned to invest on the same project to connect the track on the East Kalimantan side, stated that they were postponing the investment, citing the global financial crisis and declining coal prices as the reason for the postponement. The original plan was for the East Kalimantan project to begin in November last year before the construction for the Central Kalimantan track kicks off this year.
Governor Narang also said that the construction of the Trans Kalimantan road project that connects West, Central, South and East Kalimantan is set to be completed by September this year. The 2,900 km road project costs Rp4 trillion (about US$360 million), which is financed jointly by the governments of the four provinces.
Central Kalimantan is one of the major coal producing regions in Indonesia with proven reserves of about 4 billion tons of mostly metallurgical coal.