Servo to Complete South Sumatra Haul Road in August 2011

Indonesia - PT Servo Lintas Raya, a unit of PT Servo Meda Sejahtera which specializes on haul road development in South Sumatra, is constructing a 228 kilometer haul road from Lahat regency to Banyuasin regency , both in South Sumatra. 

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The Construction of the first stage has started since October 2008, which officially launched by South Sumatra Governor Mahyuddin NS.

“The lands that need to be capped are only 4 kilometer left in Muara Enim and 12 kilometer in Lahat. We hope that, the land capping process will soon be finalized. “ the company’s presidents commissioner Widhi Hartono said.

The haul road for coal transportation will connect the mines in Lahat, Muara Enim and Banyuasin regencies with the special terminal in Tanjung Lago at Banyuasin River. The road is passing hills, lands and swamps.

The development would be divided into two phases. Phase I builds a 139 kilometer road that connects the mines in Lahat and Muara Enim regencies and the special port In Musi River at Prambatan village, Muara Enim. Phase II consists of a 90 kilometer road linking the special port at Musi with another port in Tanjung Lago, Banyuasin.

Both the ports at Musi River and Tanjung Lago would have the capacity of 25 milion tons a year each, making a combined production and transportation capacity of 50 million tons a year.

Tanjung Lago special port has already operated with the initial Barge Loading Conveyor capacity of 1000 tons per hour (tph).

As of October 2010, the land capping Phase I has reached 92 percent while the Phase II covered 46 percent. The land clearing on Phase I has reached 62 percent and it was planned to be completed in mid December 2010.

The cut and fill and other works had started in October 2010 with the road is planned to be 15-meter wide. The establishment of bridge and underpass or fly-over will start in January 2011.

The Phase I road would start operating in August 2011. 

According to Widhi, the haul road will consist of gravel and soil to cut the project period and the cost. With the width of 10 meter, the haul road will have the initial capacity of 3 million tons of coal per year, which will be increased to 10-15 million tons year in the second year.

Later on, it will be widened to 15 meter so that it will be able to support the transportation of 50 million tons of coal annually in the fourth or fifth year of its operation.  As the transportation services will be served by 100-ton capacity trucks,coal producers will be able to cut transportation costs and ensure hauling cost stabilization.

The Musi river port, which will be developed in July next year, will have a handling capacity of 25 million tons coal per year. The capacity will be further increased to 50 million tons per year.

“We’ve prepared a 2-km water front to support a handling capacity of 50 million tons per year,” Widhi added, “We haven’t yet decided whether the infrastructure users will buy or rent it from us. We’ll wait until the infrastructure is completed.”

The second stage haul road, which is 90 km, will be developed when the Musi river port is congested.

“In the end, Servo will be offering end to end services,” he said.

According to him, the first stage development will be fully financed by the company’s coal business units, such as the coal trading unit and coal mining unit. So far, the company had spent about Rp 1 trillion for the infrastructure project, he claimed. 

Widhi said that many investors and banks have expressed their interest in joining the project. “But so far, we’re just waiting and looking for the best choice. We’re not in a hurry on this,” he added.

Currently, the coal is transported by trucks from Lahat and Banyuasin through a 200-km public road to the Musi river port, before going to Tanjung Lago port and continued to the transhipment point in Tanjung Bunyut.

The communities living along the areas have protested against the coal transportation routes. There is also a problem with lower capacity to transport coal that cannot guarantee the sustainability of coal supply.

Widhi said that his company aims to facilitate the development of the low-rank coal industry at competitive prices in the area by developing the infrastructure.

“Without haul road and ports, investors will face alarmingly high transportation costs that will hinder the development of coal industry in the area,” he asserted. Through its subsidiary, PT Bangka Coal Terminal, the company will work with PT Bangka Bulk Terminal to build a coal terminal in Bangka strait. The development is set to be completed in 2013 with a throughput of 18 million tons per year.

Servo, which has planned an initial public offering (IPO) in 2012, owns two coalmines in South Kalimantan as well, with a total production of 2 million tons per year.  The South Sumatra mines produces 3 million tons per year. 

Its South Kalimantan mines are located in Lokpaikat and Bungur sub-districts., which are both in Tapin regency. In South Sumatra, its has several coal mines in Lahat regency, including PT. Batubara Lahat, PT Bumi Merapi Energi, PT Bara Alam Sumatra and PT MME.

All the mines are operated under joint operation agreement.

Source : Coal Asia Magazine