Government not satisfied with KPC?s response

Chairman of the inter-government team for the divestment of PT Kaltim Prima Coal (KPC) Roes Aria Widjaya said that the team was not satisfied with the response from the KPC management related to the change in the mechanism in the divestment of the company?s 51 percent share, Republika reported on Wednesday.

"The letter sent by KPC is not clear. KPC?s response is ambiguous," Roes said when he was asked about the response of KPC related to the team?s plan to change in the divestment mechanism. "KPC should be clear what it wants. Does it want to use the framework agreement (FA) or the article 26 of the coal exploration and production regulation (PKP2B)? It should be clear," he said.

Roes said that his office had sent another letter to KPC and asked the company to give its firm response related to the mechanism that the company preferred to use in the sales of the company?s 51 percent share. "We are waiting for the written response until Monday," he said.

He acknowledged that the team had been asked by the higher government level to use the PKP2B as the basis for the divestment of KPC?s shares. "If KPC insists the use of the FA agreement, it will be against the government?s will," he said.

According to Roes, the FA agreement could no longer be used as the basis for the divestment because it had already expired with the failure of KPC to meet the deadline in divesting its 51 percent shares.

"We have therefore decided to return to the 26 article of the PKP2B as the basis for the divestment. In fact, the FA agreement was made, based on the article," he said.

Previously, the divestment of the KPC shares was directly supervised and controlled by a team formed by the Ministry of Energy and Mineral Resources. At present, the divestment of the East Kalimantan-based coal producer is handled by the Office of State Minister for State Owned Enterprises.

The FA agreement clearly stipulates not only the procedures of the divestment but also prices of the shares. KPC shareholders fear that the removal of the FA agreement might also result in the change of the price.

Under the previous agreement, 31 percent of KPC?s shares will be sold to the East Kalimantan administration through local companies and another 20 percent to state owned coal producer PT Tambang Batubara Bukit Asam (PTBA). (*)