DBS Bukit Asam: Buy; Rp16,000; TP Rp18,550; PTBA IJ

SOE Ministry orders PTBA to seek new partners in railway project

The Jakarta Post reported that the State-Owned Enterprises (SOE) Ministry has ordered Bukit Asam (PTBA) to drop its planned joint venture with Transpacific Railway Infrastructure (TRI) and China Railway Engineering Corporation (CREC) to build the Muara Enim-Lampung railway project. The order came following a long delay in execution and potential increase in the budget. The SOE Minister revealed that there were several companies interested to cooperate with PTBA on the project (including one from China), which are expected to minimise the huge budget needed and resume the project.

PTBA management, quoted from another article, revealed that the company currently has no plan to change the joint-venture partners. PTBA and its current partners are expected to sign the Engineering Procurement and Construction (EPC) this month, after which project funding is expected to be obtained within one year thereafter. The new railway is expected to commence in 2014.