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Russian Railways - construction of a railway on the island of Kalimantan

Russian Railways - construction of a railway on the island of Kalimantan

The project was presented in September at the investment business forum in Moscow, which was organized by the Indonesia Investment Coordinating Board.

The project has been elaborated since summer 2010. It plans construction of a railway and associated infrastructure connecting northern areas of Central Kalimantan with the eastern coast of the island. The length of the route will be about 300 km. At the present moment the transportation system of the Kalimantan Island is feeble, represented by river navigation routes and haul roads.

JSC “Russian Railways” experts have worked out the project’s pre-feasibility study, have determined key indicators proving its financial viability and feasibility, and have identified the preliminary alignment.

The project is being realized according to the so called “Equator Principles”, i.e. strictly regulated social an environmental criteria of international investment banks working in the field of project financing. Special consideration is given to keeping off the protected tropical forests areas and to social commitments that imply training and employing local population. These advantages of the project were particularly noted by the Indonesian party.

The realization of infrastructure projects of that scale requires an intergovernmental support. Intergovernmental working agreements and financial guarantees are required from both parties, guaranteeing loans by the commercial banks and export crediting for the part of the project in which Russian companies are participating.


Concluding the meetings, the Indonesian party has expressed willingness to provide support and overall cooperation in the realization of the project.

It is planned that up to USD 2 bn. financing for the construction will be provided by the major international banks. Additionally up to USD 500 m. of investments will be raised from private investors, including the ones strategically and/or financially interested in the project.

JSC “Russian Railways” is interested in receiving a turnkey contract for design, construction and maintenance of the developed transport infrastructure. This project can become one of the company’s largest overseas contracts.

At the present moment JSC “Russian Railways” is securing the project’s approval on the intergovernmental level and is finalizing its feasibility study.


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