Summary：China will develop coal mining train systems in Central Kalimantan and South Sumatra as well as Soekarno-Hatta International Airport’s express railway and a Solo-Jakarta railway.

China negotiating investing more than $5 billion in Indonesian Railways as Vice President Boediono and China’s Vice Premier Prime Hui Liangyu held talks in Jakarta.

China will develop coal mining train systems in Central Kalimantan and South Sumatra as well as Soekarno-Hatta International Airport’s express railway and a Solo-Jakarta railway.

Economist Shayne Heffernan maintains a strong buy on Coal and Indonesian Coal Miners.

The railway project in South Sumatra is the most advanced among the four as Chinese company China Railway, has teamed up with two local companies, Transpacific and Bukit Asam, to start building work in a joint venture.

The three companies will put forward up to $1.3 billion to build a 300-kilometer railway system from Muara Enim in South Sumatra to Lampung.

Bambang said that the companies will immediately start construction of the railway project.

In the 185-kilometer Cahu-Bangkuang route in Central Kalimantan, which is worth $2.3 billion, China Railway will join forces with Bakrie Group.

China Harbour will handle the $1.1 billion Soekarno-Hatta express railway. Possible local partner, Sarana Multi Infrastruktur, is currently reviewing the project.

Meanwhile, the Solo-Jakarta double track railway has just been recently offered by the government to China’s companies.

China’s Hui is on a two-day visit to Indonesia for the final leg of his global tour, which has taken him to Macedonia, Montenegro, Namibia and Zimbabwe.

He and Boediono have pledged to raise bilateral ties to a new high during their meeting, Vice Presidential spokesman Yopie Hidayat said.

Yopie added that both officials focused their discussion on economic affairs, including how Indonesia and China can cooperate to boost rice production.

“We have a challenge to meet domestic demand on rice. China is a rice producer so we are considering exchanges of seeds and technology to increase our productivity,” he said.

Indonesia initially aimed to have a rice production surplus of 10 million tons by 2014. However, it later delayed achieving the target to 2015.

Yopie also said that the leaders of Indonesia and China agreed to swap komodo dragons and endangered pandas during President Susilo Bambang Yudhoyono’s visit to Beijing last month as a symbolic gesture of the two nations’ improved bilateral relations.

During the meeting between Hui and Boediono, the komodo-panda swap was among the items discussed.

“The two animals are symbolic in the two respective countries. We hope to exchange them in a hope to further strengthen our countries’ ties,” Yopie said.

“The deputy prime minister [Hui] said he was going to soon follow-up on the exchange plan and realize it. The vice president [Boediono] welcomes the intention.”

Separately, an official said that Indonesia and China are continuing discussions on the transfer of technology for the joint development of the C-705 missile, which will be used by the Indonesian Navy.

The defense attache of the Indonesian embassy in China, Col. Lek Suryomargono, said on Tuesday in Beijing that the technology transfer was one of the key elements of Indonesia’s bid to procure arms from China.

Suryomargono said the purchase of the C-705 is part of the two countries’ defense industry agreement.