SKorea, Indonesia Sign ‘Billion-Dollar Rail Deal’

JAKARTA ~ Two South Korean companies signed an agreement with an Indonesian state firm this week to build a railway line in Kalimantan in a deal worth US$1 billion, reports said.

South Korea’s POSCO and Canatect Ltd signed a memorandum of understanding with PT Kereta Api Indonesia, according to local media reports.

Transport Minister Hatta Radjasa was quoted as saying the railway line would be built in east Kalimantan, the Indonesian part of Borneo island.

No further details were available and a transport ministry spokesman declined comment.

The reported deal on Monday came on the first day of a visit here by a large South Korean delegation made up of business leaders and government officials to follow up on an agreement to forge a strategic partnership between the two countries.

The agreement was reached during South Korean President Roh Moo-Hyun’s visit to Indonesia in December.

Radjasa was quoted saying the deal was the second since a new transport law was enacted, allowing the private sector to play a greater role in the development and operation of railways in Indonesia.

A Japanese consortia qualified last month to bid for a railway project in West Java at a cost of about $660 million.

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