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Coal project gets the go-ahead

15 May 2009

INDONESIA: The Regency of East Kutai granted approval in late March for a 150 km railway linking coal mines at Muara Wahau in East Kalimantan to the coast. It is promoted by Trans Kutai Kencana, a special purpose vehicle formed by the regional authority’s investment body and companies owned by the government of Ras Al Khaimah, one of the United Arab Emirates.

Arup has completed engineering design for the line. Land acquisition is underway, and construction will begin this year for completion within 30 months. The line and coal loading jetty will open in 2012 with an initial capacity of 17 million tonnes/year, and provision for 60 million tonnes/year.

KMPG produced financial models for the project, which is being developed by Middle East Coal, a Singapore-based company set up in 2008 by the Ras Al Khaimah government and Trimex Group to invest in coal and related infrastructure projects. It aims to secure the energy requirements of Ras Al Khaimah, and supply markets including Indonesia, India and Japan.

Islamic financing worth 1·83bn dirhams is now being sought for the project, which the backers expect will benefit from the fall in construction and rolling stock costs resulting from the international financial crisis.