Quote:KAI secures Rp 4.02t loans to buy locomotives and carriages

State railway operator PT Kereta Api Indonesia (KAI) has secured loans totaling Rp 4.02 trillion (US$458.28 million) from state banks Bank Negara Indonesia (BNI) and Bank Rakyat Indonesia (BRI) to finance its fleet expansion.

KAI director Ignasius Jonan said the loans would be used to purchase 144 locomotives — 44 units for its operation in South Sumatra and 100 units on Java Island — and 2,400 train carriages — 1,200 units to carry coal, while the rest to transport industrial products, including cement, steel and consumer goods.

Currently, KAI operates 300 locomotives and 3,800 carriages.

Jonan said that the loans would account for 85 percent of the total costs for the purchases of locomotives and carriages, which were expected to reach Rp 4.74 trillion. BNI and BRI will provide Rp 2.01 trillion each in the loan syndication.

The new locomotives would operate in South Sumatra to transport coal of coal miner PT Bukit Asam’s (PTBA) coal from its coal mine in Tanjung Enim to Tarahan cola terminal in Lampung, he said after the signing of the credit agreement with the banks’ representatives in Jakarta.

PTBA in cooperation with PT Adani Global of India are currently building a 270-kilometer railway with a total investment of $1.67 billion to deliver coal from Bukit Asam’s coal mine to a coal terminal at Tanjung Api-Api Port in the province. The company and KAI are also expanding the railway road from its mining areas to the Tarahan Terminal.

Jonan said that in Java, demands for goods delivery by train had been surging rapidly in recent years. At present, the company carried between 2,000 and 2,500 containers every week compared to 300 and 500 containers only three years ago, he said.

“With these new units, we expect to enhance our capacity to between 5,000 and 7,000 containers on a weekly basis,” he said.

Jonan expected that the procurement of the locomotives and carriages would be fully completed in 2013 and increase the contribution of the goods delivery service to the company’s revenue from 41 percent to 60 percent in 2014.

BNI director Gatot M. Suwondo said that the credit was a part of its effort to take part in overcoming various bottlenecks in the country’s development, including in the transportation sector. “This credit is one of our ways to participate in the development of our domestic connectivity. Delivery by train is more efficient than those by other land-transportation means. Such efficiency will encourage the growth of our industry,” he said.

State-Owned Enterprises Minister Mustafa Abubakar, who witnessed the signing, said that the procurement of the new units would be a significant breakthrough for KAI to expand its business. Furthermore, he added, the effort to improve the transportation infrastructure and connectivity, was in line with the government’s newly launched economic master plan. On Feb. 22 President Susilo Bambang Yudhoyono launched a blueprint to develop the nation’s economy until 2025.

In response to this plan, the State-Owned Enterprises Ministry said it would allocate about Rp 836 trillion from its capital expenditure in 2011 to 2014 to support the economic development. (lnd)