PTBA delays coal railway project due to licensing problem

State owned coal mining company PT Bukit Asam Tbk (PTBA) has delayed the company?s 270-kilometer railway project which will be used to transport its coal production to the port, Kontan business daily reported.

PTBA?s President Director, Milawarma, said in Jakarta on Friday that the construction of the coal railway project could not be resumed due to a licensing problem.

According to the Transportation Minister?s decree No. 91/2011, a coal railway should be built and operated by a company which owns coal concession areas. The planned coal railway is built and operated by a joint venture between PTBA, PT Adani Global, a subsidiary of an Indian company, and the South Sumatra provincial government.

According to the regulation, the joint venture is not allowed to build and operate the coal railway because it does not have coal concessions.

?The joint venture can not build the railroad because the concession areas are owned by PTBA,? Milawarma said.

The 270 km railway line will link PTBA?s coal mines in Tanjung Enim to Tanjung Carat port. PTBA earlier expected the railway would begin commercial operation in 2016. (*)