Adaro agrees to provide bridging funds to local governments

South Kalimantan-based coal producer PT Adaro Indonesia has agreed to provide bridging funds to Hulku Sungai Utara and Tabalog regencies which have suffered a serious financial problem due to the delay in the disbursement of the coal royalties from the ministry of finance, Banjarmasin Post reported on Tuesday.

Ismail Syarkawi, the spokesman for Adaro Indonesia, said in Banjarmasin on Monday that the coal producer had no problem to provide the bridging funds as long as the finance ministry approved the financing facility.

?We have asked a guarantee letter from the Ministry of Finance but we have not received any response until now,? he quoted by the local newspaper.

The two regencies have formally proposed PT Adaro to provide bridging funds for their unpaid royalties. The regencies have not received the royalties from the company for 2001 and 2002, amounting to Rp 16 billion and Rp 15 billion, respectively due the late disbursement from the Ministry of Finance.

Adaro paid royalties worth about US$37 million a year to the government, or about 13.5 percent of the company?s coal production, through the ministry of finance. The two regencies however have not received their shares until now. (*)