Kalimantan Logistics Railway to Be Fully Privately Funded, Not State Budget

Indonesia plans to build a 2,772-kilometer logistics railway network in Kalimantan, a project that will be entirely funded by private investors. Transportation Minister Dudy Purwagandhi emphasized that the state budget will not be burdened, as the initiative will be offered to private entities. He also suggested that PT Kerai Api Indonesia (Persero) could invest if the business prospects are favorable.

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We offer it to private parties to build it (the logistics railway network in Kalimantan).

This approach is inspired by the successful commercial operation of a railway in South Sumatra, managed by PT KAI without state subsidies. This venture significantly contributes to the company's revenue, enabling it to sustain other services, particularly on Java. The minister highlighted this as a sustainable business model that allows for cross-subsidies between different business lines, ensuring efficient and continuous operations.

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Oh, he (President Prabowo) is pushing for the logistics railway (in Kalimantan).

President Prabowo Subianto has urged for the prompt development of the Kalimantan logistics railway to meet national needs. However, the acceleration of the project hinges on investor readiness, given the substantial investment and meticulous business planning required. The government is forming a committee involving various ministries and agencies to refine the National Railway Master Plan, aligning it with Kalimantan's specific requirements. This is crucial as the island, rich in natural resources like minerals, currently lacks adequate rail infrastructure for efficient logistics distribution and inter-provincial connectivity.

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Building a railway is not cheap.