Bukaka to sue government over contract dispute

Former minister of trade and industry Yusuf Kalla said PT Bukaka would sue the government and the state owned electricity company PLN at the Administrative Court for unilaterally canceling the contract worth US$75 million won by his company.

"We will send the third warning within 10 days to the government, because the two warnings had been ignored," Yusuf was quoted by Detik.com as saying. "If the government does not give a positive response to the final warning, we will certainly take the case to the Administrative Court," he added,

Bukaka won the contract in late 1999 to build a US$75 million power transmission network linking the Paiton power plant in East Java and a power distribution network in West Java. But the contract was annulled in May this year on grounds that the company was financially unfit to carry out the project.

President Abdurrahman Wahid has said that the contract was cancelled because it was obtained through KKN, the local acronym for corruption, collusion and nepotism. Gus Dur also dismissed Kalla in April from his ministerial post for his alleged involvement in KKN in the power project.

Kalla denied all the charge, saying that the government's move to annul his company's contract was made to pave the way for Gus Dur's crony to take over the project. He said that a close friend of Gus Dur, Harold Jansen had intensively lobbied PLN to cut the contract awarded to his company. The man wanted the government and PLN to name ABB consortium to replace Bukaka in the project.

The government later said that the project would be re-tendered and all, including Bukaka will be allowed to join the bidding. But Yusuf said that his company was not interested in the offer and it would instead sue the government if it refused to reinstate the suspended contract.

According to Kalla, his company has spent more than Rp 3 billion (US$1=Rp 8,500) to prepare the project. (*)