East Kalimantan to file legal suit against minister on KPC divestment

The East Kalimantan administration will file a legal suit against Minister of Energy and Mineral Resources Purnomo Yusgiantoro and director general of geology Wimpy S. Tjetjep over delay in the divestment program of coal mining giant PT Kaltim Prima Coal, according to Bisnis Indonesia daily.

The paper quoted a press release from the East Kalimantan administration, as also saying that next week the provincial prosecutor office would start questioning KPC top officials and the company?s legal consultant over alleged corruption.

KPC is obliged to divest up to 51 percent stake to the East Kalimantan administration. After being delayed for several times due to various problems, the provincial administration was promised that the program would be completed by the end of this year. But protracted disagreement over divestment price forced the ministry of energy and mineral resources, which directly negotiate with KPC management and shareholders, decided to set another deadline: March 2002.

The government has valued the 51 percent stake of KPC at between US$319-329 million, while KPC shareholders, Rio Tinto and BP, demanded $442 million.

To settle the price issue, the government has decided to appoint an independent appraiser.(*)