Sugi Sinar signs MoU on Indon waterways project

  • Business
  • Wednesday, 28 Jan 2004

SUGI Sinar Sdn Bhd, a property, infrastructure and utilities developer, has signed a memorandum of understanding with its Indonesian partner, PT Arthama Investindo, to jointly develop and manage the Asam-Asam Waterways in Tanah Laut, south Kalimantan. 

The proposed waterways would be developed and managed for a concession period of 15 years, Sugi Sinar said in a statement.  

The company, which is active in a number of property development projects, infrastructure and utilities in Sabah, Labuan, and Kuala Lumpur, is expanding its development, infrastructure and utilities development arms into Indonesia. 

The Asam-Asam waterways development would be one of few identified projects to be undertaken by the company this year and was expected to contribute significantly to the company's cash flow from the 2007 financial year, it said. 

Sugi Sinar said the need for waterways in Tanah Laut was the result of its local government having made it compulsory, through an amended Act, for coal miners to transport coal only through waterways. 

Tanah Laut is the largest coal production centre in Kalimantan, with six large mines. 

Following this, the Asam-Asam River – the longest river connecting all the coalmines – has been selected to be developed as the main waterway channel for transporting the coal. 

The concessionaire is expected to collect toll/tariff charges based on the weight of cargo from users. 

The volume of traffic along the Asam-Asam River is expected to increase dramatically in the next three to five years as a result of the proposed development, the company said. 

Sugi Sinar said Arthama Investindo, through its subsidiary PT Batugeni Tala, had secured the right to develop and manage the waterways. 

Batugeni Tala has been given a 15-year concession to collect toll from users of the waterways and in line with this, the concessionaire has also locked in a back-to-back agreement with coal producers that guarantees a minimum amount of traffic. – Bernama 

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