Adani Enterprises to build rail, port project in Indonesia

Our Bureau New Delhi | Updated on January 25, 2011

Adani25   -  Business Line

Signs pact for 250-km rail link at a cost of $1.65 billion

Adani Enterprises will build a 250 km rail link and port infrastructure in Indonesia at an estimated cost of $1.65 billion. The link will be used to transport coal from a coal mining company in Indonesia.

Adani Enterprises has signed an agreement to set up “rail and port project” with the Regional Government of Sumatra Selatan, Indonesia and PT Bukit Asam Tbk, an Indonesian Government coal mining company, said a statement.

Coal evacuation

The project will be executed by PT Adani Global, a subsidiary of Adani Enterprises, over 48 months. It will involve construction of 250 km railway line and port infrastructure for transporting and loading of up to 60 mtpa (million tonnes per annum) of coal. The rail link will help connect Tanjung Enim, the coal mining area to Tanjung Carat, where the Adani Group will set up a class port for evacuating the coal.

PT Bukit Asam Tbk, one of Indonesia's leading coal producers with the largest coal reserve in the country, has provided “coal purchase rights” to PT Adani Global on take or pay basis with minimum volume of 35 mtpa. The concession has an initial validity of 30 years from signing of the agreement and can be extended mutually.

According to the agreement, PT Bukit Asam Tbk will sell 60 per cent of its coal from the Tanjung Enim area to Adani at a government notified price.

Pact signed

The Adani Group Chairman, Mr Gautam Adani, today signed the pact with Mr Alex Noerdin, Governor of the South Sumatera province of Indonesia and Mr Sukrisno, President Director, PT Bukit Asam Tbk. This agreement is pursuant to a tripartite memorandum of understanding signed in August 2010. It reaffirms key milestones and principles of this major infrastructure project.

Mr Gautam Adani said, “These initiatives in Indonesia, Australia and even in India will bring us closer to achieve our stated goal of 20,000 MW of power generation, 200 mtpa of coal mining, 200 mtpa of cargo handling and owning 20 capesize ships by 2020.”

Published on January 25, 2011

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