Bukit Asam infrastructure project could fail

Mega infrastructure project, including railway line, to be developed jointly by Rajawali Group and listed PT Bukit Asam Tbk worth US$1.8 billion might not be realized after commissioners board of PT Bukit Asam declined to grant permit for the handover of mining right to its subsidiary.

As a result, the approval for financing from China, which is expected to be materialized in December 2011, is being hampered.

The Chinese government through its 421 program has set aside billions of US dollars to finance projects in other countries. The financing closing of the infrastructure project is scheduled to be materialized in December this year.

The commissioner board?s opposition to the permit handover was stated with its letter No. 13/dekom/IV/2011 to the company?s board of directors.

The commissioners that signed the letter were Chief Commissioner Supriyadi, Suranto Soemarsono (independent commissioner), Abdul latif Baky (independent commissioner), Thamrin Sihite (commissioner and director general for mineral resources and coal) and U. Hayati triastuti.

The commissioners argued that based on the article 93 of the Law No. 4, 2000 on Mineral Resources and Coal, a mining permit (IUP) shall not be handed over to other party. Therefore, Bukit Asam shall not hand over its mining permit to PT Banko Bara Utama and other subsidiaries of the company.

The commissioner board?s letter opposed to the letter issued by Directorate General for Mineral Resources and Coal, No. 1157/30/DJB/2011 to PTBA?s President Director, which allows PT Bukit Asam to transfer its IUP to its subsidiary, PT Banko Bara Utama.

President Director of Rajawali Asia Resources and PT Bukit Asam Transpacific Railway (BATR), Rudiantara, confirmed over the problem.

?The project is to be jointly developed by Rajawali Group and PTBA. They (Bukit Asam) is responsible to deal with mining operation. Since the joint agreement to develop the mega project, signed in 2009, the approval to handover the permit (IUP) has not been finalized," Bisnis Indonesia quoted Rudiantara as saying (*)