Russian Railways (RZD) partnered Singapore’s Eurasia Infrastructure, which specializes in production and maintenance of rolling stock, for the construction of a railway line in Indonesia, business daily Vedomosti reported.
According to a report of RZD’s subsidiary, OAO “RZDstroy” (JSC) , it purchased a 50% plus one share stake in Kalimantan Rail from Eurasia Infrastructure for 50,000 in Q3 2013. A representative of Eurasia Infrastructure did not specify the size of the remaining stake in the ownership of the Singaporean company.
Kalimantan Rail is building a 300km railway between the provinces of Central and East Kalimantan, which are estimated to have 50bn tons of coal reserves, to a coal shipping terminal. Coal production capacity that reaches 15 million tonnes to 40 million tonnes per year.
Investment in the project is expected to amount to USD 2.5bn. So far Kalimantan Rail has already spent USD 15 million dollars for the construction of the railway line and the terminal, expected to be constructed by 2016. RZD Stroy has taken out a four-year USD 20m loan from Gazprombank at 6.75%. The company will lend these funds to Kalimantan Rail at 7.5%. Kalimantan Rail received 15m from RZD Stroy in 2013 and is expected to receive 5m in 2014.