Investors including the United Arab Emirates and Dubai-based Trimex Group plan to begin construction early next year on a railway in Indonesia's East Kalimantan province, the Indonesian Investment Coordinating Board said Tuesday. MEC Infrastructure, a joint venture of Trimex's MEC Holdings and the U.A.E. government of Ras al Khaimah, plan to complete the railway in 2012.
The 130-kilometer track, the first private railway in Indonesia, will link the Muara Wahau coal mine in East Kalimantan's East Kutai district with the coast, where MEC Holdings is spending $250 million on a new port. The coal mine is being developed by MEC Coal, another joint venture of MEC Holdings and Ras al Khaimah.
The project is part of $5 billion in investments by the group and India's state-owned National Aluminum Co., the investment board said. The mine and railway are central to a complex of facilities that will also include a coal-fired power plant, an aluminum smelter, a fertilizer plant and a port terminal.
The investors took their plans to the Indonesian government in July of last year. But the project was held up by bureaucratic delays, including difficulties in obtaining a railway operating license from the Transport Ministry. The problem was resolved recently as part of efforts to unblock investment bottlenecks, said Gita Wirjawan, chairman of the investment board.
"The railway permit approval was a serious, coordinated effort" by local and central government officials, Mr. Wirjawan said. "It shows each party's commitment towards fulfilling its priority development goals in infrastructure."
