Cal Energy demands Indonesia pay $290m in compensation

The overseas private investment corporation (OPIC) has again asked the Indonesian government to settle its obligation to pay US$290 million in compensation to California Energy over the government's arbitrary decision to stop its Patuha and Dieng power projects.

State Minister of Investment Rozy Munir said on Monday that OPIC president David Wossfford and executive vice president Kirk Robertson met him in New York recently and asked him to give a definite answer by the end of this month.

But Rozy said he could not give any definite answer to OPIC as his office was not the one to decide, but it should be the Ministry of Finance.

Rozy only promised them that he would pass on OPIC's demand to the minister of mines and energy and the president director of state-electricity company PT PLN.

"We must quickly tackle this problem because they gave us only 20 days to respond. I'm afraid that they would confiscate our assets," he said.

California Energy brought the Indonesia government and PLN to an international arbitration over the latter's decision to cancel its projects in Indonesia. Cal Energy won the case.

Rozy said that the government should review all contracts which burden the government, so that it would not backfire in the future like contracts with Cal Energy. (*)