Government to provide bridging fund for PT PIM
Wednesday, June 15 2005 - 02:48 AM WIB
"We don't know when the funding will be realized because it will depend on the ministry of finance to decide. But for sure, the government will try hard to save the fertilizer company from collapsing," Director General of Agro and Chemical Industries at the Ministry of Industry, Benny Wahyudi said in Jakarta on Tuesday.
He said that the use of the bridging funds was needed because PT PIM was in financial difficulties to pay its gas procurement. "PT PIM is only able to provide about US$7 million of between US$18 million and US$21 million needed to buy a cargo of gas," he was quoted as saying.
PT PIM has suffered a shortage of gas supply due to the decline in the production of gas producer PT ExxonaMobil Indonesia, the only gas suppliers in the province. At present, its gas production is only enough to meet the export commitment of LNG producer PT Arun.
The government has ordered Exxon to resume its gas supply to PT PIM to prevent the company from halting its production activities. In return, the government has agreed to import LNG in order to help the LNG producer meet its export commitment.
However, PT PIM said that the company could not fully pay the LNG import due to its worsening financial condition. To solve this problem, the government decided last week to allow the company to export its production in a bid to get more revenues from its fertilizer production.
Benny said with the new policy to allow the company to export its fertilizer, he was optimistic that PT PIM would be able to repay the bridging funds to be provided by the government. (*)