<div>Adani Group has pulled out from a $1.7-billion coal railway project with Indonesian state coal miner PT Bukit Asam in South Sumatra due to Indonesia's tough restrictions on licensing, said Bukit Asam's chief executive.<br /><br />Bukit Asam's CEO Milawarma also said that it is still in ongoing discussions with Indonesia's Rajawali Group to start another $2-billion South Sumatra coal railway project, which has also been delayed for years on licensing and valuation issues.<br /><br />The setbacks show the difficulty for investors in developing large infrastructure projects in Southeast Asia's biggest economy due to uncertain and overlapping rules, despite government commitments to support development.<br /><br />The projects are in theory straight-forward and should be easy to get going, the soft-spoken Milawarma told Reuters in his Jakarta office. "But there are lots of sectors involved ... mining regime changes and this scare off investors."<br /><br />Officials with the Adani Group were not immediately available to comment.<br /><br />The delay in the projects has hurt expansion plans from the state coal miner, which owns one of the nation's largest coal deposits at 7.3 billion tonnes.<br /><br />Bukit Asam will produce around 17 million tonnes in 2013, a 30 percent increase from 2012. But that is far below the expected production by Asia's biggest thermal coal exporter PT Bumi Resources at 77 million tonnes this year.<br /><br />The future of the projects also faces other risks, including weak coal prices and concerns China will reduce imports of low-calorie coal, Milawarma said.<br /><br />He said that the company plans to shift its coal shipments to India if China declines to take it.<br /><br /><br />(Reuters)</div>
