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First rail project on Indonesia's Sulawesi island picks up steam

Consortium including Chinese company targets commercial operations next year

Indonesian President Joko Widodo, second from left, in November 2015 inspects a section of track that is part of a landmark railway project on the island of Sulawesi.   © Presidential Palace/AFP/Jiji

JAKARTA -- A long-delayed project to construct the first railway on the Indonesian island of Sulawesi is gaining traction, with contractors securing 693.8 billion rupiah ($48.5 million) in an Islamic law-compliant syndicated loan led by Bank Syariah Indonesia.

The financing agreement is for the construction of a 145 km system encompassing five municipalities and regencies in South Sulawesi Province. It will connect the provincial capital Makassar, the largest city on the eastern Indonesian island, with the town of Parepare. Commercial operations are targeted to start next year.

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