Russian Railways to Build 575-km Railway in Indonesia
Russian Railways is to build a 575-km, $2 billion railway in Indonesian Borneo, linking the remote district of Tabang with the coastal area of East Kutai in East Kalimantan Province. The company previously signed a cooperation agreement with Vietnam Railways. The Indonesian project exploits a niche in the market for Russian Railways, where other major railway construction companies, such as China Railways Co., have recently aimed at more lucrative high-speed projects. Russian Railways has also focused its international activities on railway upgrading, including the electrification of a 495-km stretch between the cities of Garmsar and Ince Burun that is due to be completed in 2021.
If cost estimates are correct, the railway will cost around $3 million per kilometer. This suggests that the railway will not operate as a high-speed line. Chinese-built high-speed railways have been priced closer to $15 million per kilometer. With completion forecast for 2022, the railway will first be used for goods and natural resource transport, but passenger services will reportedly begin after five years. Borneo is rich in timber, oil, natural gas, coal, gold, spices, and rubber.