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PT Freeport Indonesia has two types of mining techniques, namely open-pit mining (Grasberg) and underground mining. Along with Grasberg mine depletion, has led to the underground mine development activities include the expanding area of Big Gossan, Grasberg Block Cave (GBC) and Lower Deep Mine Zone (DMLZ). This prompted the need for the availability of rail transport infrastructure that can connect multiple areas of underground mine production until next year 2041. PT Freeport Indonesia decided to outsource Principal Rail Contractor (PRC), turnkey project, due to limited resources to do the job and lack of expertise in the field of railways in accordance with the target. Currently the process of outsourcing the PRC has entered a stage of the appointment of three winners of the best contractors Alstom; Ansaldo-Balfour Beatty, and Bombardier-Rhomberg. In connection with the outsourcing cycle, it is required a risk management and evaluation of policies and process outsourcing internally in Central Service Division. Based on Central Statistical Service reports indicate that some outsourcing projects experienced delays, poor product quality and service, and there are cost overruns. The final project analyzing the effectiveness of PT Freeport Indonesia's decision in selecting the outsourcing company and mitigate the risks that arise in outsourced projects, such railroad. The PRC contractor selection uses selection criteria and weighted score. While risk management analysis use the adopted method from PT Freeport Indonesia HIRADC matrix score card. This method is very commonly used among the employees of PT Freeport Indonesia in terms of mitigating the incidence of accidents in the areas of safety, health, and environmental. From the results of weighted scores and risk analysis applied to the three outsourcing contractor, the evaluation team recommends Alstom as the winner of the PRC. This is because Alstom demonstrates an understanding of mining operations of PT Freeport Indonesia, the ability to provide complete information about the required construction equipment, the existence of the company and the proposal (schedule & cost) is proposed to have a smaller risk compared with other contractors to provide turnkey solution. However the success of this project is not solely determined by the election of the contractor, but also the outsourcing process cycle after the selection phase. By doing risk analysis and mitigation plan that happens to interface with the building of rolling stock, a significant change from the terminal layout, unavailability as-built drawing, late delivery of the rails work machine equipment, a fatal error in the supply of critical spare parts, soaring raw material prices of copper, handover schedule to begin construction area that is not appropriate, as well as the delivery of equipment, expected to be the appropriate control equipment to reduce the impact of the risk of project failure-scale U.S. $ 20,000,000.