Gov`t Awaits Chinese Investor over C. Kalimantan Railway Project

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  • TEMPO/Pius Erlangga

    TEMPO/Pius Erlangga

    TEMPO.CO, Jakarta - The Transportation Ministry is awaiting the commitment of China Railway Group Limited to invest in Central Kalimantan railway project. The Ministry said it could not grant project permit without funding certainty. “China Railway has never showed up. We have only seen the local investor instead,” Transportation Minister Budi Karya Sumadi told Tempo yesterday.

    Earlier on Tuesday, Central Kalimantan Governor Sugianto Sabran said he had asked for a government guarantee for the project. “President Joko Widodo asked what the problem was” Governor Sugianto said at the Presidential Palace on Tuesday.

    Sugianto had also asked the government to issue a borrow-to-use permit for the region’s forest area. Sugianto had confirmed Chinese investor’s interest in the railway project.

    Budi, however, said that China Railway’s local partner is the one who insisted on proceeding with the project. Budi said that the local investor had asked for a guarantee from Central Kalimantan Governor for the project. “A guarantee that the project will not be awarded to any other [investors],” Budi said.

    He said that the government will not easily provide a guarantee to prospective investors such as China Railway who so far had yet to show real intent. Budi also asserted that the government will not provide funding certainty for the project.

    On the borrow-to-use permit for Kalimantan forest, Environment and Forestry Minister Siti Nurbaya said that the Central Kalimantan government had already filed a borrow-to-use permit for industrial forests. According to her, the railway project will pass through eight industrial forests and six concession forests. “Clarification process is underway,” Siti said.

    Central Kalimantan railway project is included in the national strategic project list. President Joko WIdodo had earlier instructed his subordinates to work on national strategic projects in underdeveloped regions.

    Central Kalimantan railway project is expected to facilitate coal transportation. The railway will be connected with East Kalimantan railway developed by a Russian investor Russian Railways.

    Russian Railways plans to build a 203-kilometer-long track from West Kutai to Balikpapan worth US$2.423 billion or equal to Rp32.2 trillion.