"We will hand over railway projects in South Sumatra and East Kalimantan to the private sector," Transport Minister Budi Karya Sumadi said here on Friday.
Widening current account deficit and falling value of rupiah has forced the government to adopt budget tightening policy curbing its ambition of massive infrastructure development. The government has announced the shelving of infrastructure projects not yet reaching financial close not high in priority and raised the import duties on various consumer goods that could be substituted in the country.
Budi said a number of private investors including foreign investors have indicated interest in the offer.
He said in South Sumatra a new light rail transit (LRT) has been in operation in Palembang but it will need additional stations.
He said there are also other railway projects such as reactivation of idle rail routes in West Java.
"This year we also would concentrate on reactivation of a number of abandoned rail routes in West Java," he said.
He said state-owned railway company PT Kereta Api Indonesia (KAI) will be involved in investment by giving a concession of 20-30 years.
The plan is to reactivate four abandoned rail tracks in West Java including Banjar-Cijulang-Pangandaran-Parigi, Garut-Cikajang, Cikudapateuh Bandung-Banjaran-Ciwidey, and Rancaekek-Tanjungsari.
Other railway projects to be built in cooperation with the private sector include Makassar- Pare-pare in which South Korean investors has indicated interest.
The minister said railway projects have the largest portion of the ministry`s budget accounting for Rp15.242 trillion of its total budget of Rp41.55 trillion for 2019.
The minister gave no figures for the value of investment in each of the projects in South Sumatgra and East Kalimantan and other areas.
Reporting by Juwita Trisna Rahayu
Editing by A Saragih, Yoseph