KAI secures $94.3m credit to buy GE’s locomotives

JAKARTA. State-owned train operator PT Kereta Api Indonesia (KAI) has secured credit worth US$94.3 million from the Export-Import Bank of the United States to finance its purchase of 50 locomotives from American technology giant General Electric (GE) Co.

The loan agreement was signed by KAI president director Ignasius Jonan, Ex-Im Bank chairman and president Fred P. Hochberg and GE transportation president and CEO Russell Stokes in Washington on Wednesday.

“Ex-Im is proud to facilitate transactions like this one, which will support 700 quality jobs here in America even as it empowers Indonesia to build an enduring, reliable transportation infrastructure on the foundation of quality US products,” Hochberg said in a written statement.

GE will build 50 locomotives in Pennsylvania and deliver them next year to Indonesia, according to GE CEO Stokes.

Contacted separately, KAI commercial director Bambang Eko Martono said the locomotives would be used as freight trains both in Sumatra and Java.

“The locomotives will be used to transport coal in Sumatra and Java. Thirty nine will be located in Sumatra while the rest will be used in Java,” Bambang said on Thursday.

He added that the company was expected to deliver the locomotives by the third quarter of next year.

Around 42 percent of the firm’s revenue last year was derived from the passenger sector, while 39 percent was from transporting freight. Half of the revenue from freight came from transporting coal in South Sumatra, particularly for state-owned coal miner PT Bukit Asam.

The company is planning to increase freight contribution by more than 50 percent in the coming years, according to KAI’s corporate secretary Wiwik Widayanti. The firm has allocated Rp 7.2 trillion in investment from the fiscal year 2012 to 2014 to expand into the goods and container transportation businesses.

KAI previously aimed to reap Rp 9.7 trillion ($791 million) in revenue, a 20 percent increase on a year earlier. The company booked Rp 560 billion in net profits last year, an increase of 31.7 percent from Rp 425 billion a year earlier.

During the first half of this year, KAI booked a 123 percent increase in revenue to around Rp 8.6 trillion and a 20 percent increase in profit to Rp 326 billion compared to the same period last year, on the back of higher railway capacity.

Since the end of April this year, the Transportation Ministry has put into operation 428 kilometers of the Cirebon, West Java-Kandangan, Surabaya section of double track railway, while the Jakarta-Cirebon section has been in operation since 2009. The ministry is still overseeing the construction of the final 8 km from Kandangan to Pasar Turi Surabaya.

Over the past three years, KAI has prepared around 100 locomotives and 1,200 flat cars that will be used to support the double track railway.

A total of 24 new passenger coaches arrived during the first half of this year, while another 104 coaches will be delivered before the end of this year.(Nadya Natahadibrata)