Govt confirms plan to sue E. Kalimantan over KPC case
Thursday, July 4 2002 - 12:24 PM WIB
The action against East Kalimantan is meant to ensure that the divestment of 51 percent of KPC shares will be held no later than July 31, the deadline agreed on by the central government and KPC shareholders Rio Tinto and BP Plc, said secretary general of the Ministry of Energy and Mineral Resources Djoko Dharmono.
?The central government?s move aims to force the East Kalimantan administration to drop its legal suit against KPC shareholders. If we win the legal battle, KPC share divestment can go as planned,? Djoko told reporters.
Threats to sue East Kalimantan in court were revealed recently by East Kutai regent Awang Faroek Ishak shortly after a meeting of central government officials and KPC leaders.
In their meeting, government and KPC officials agreed to extend the deadline of KPC share divestment for another one month, from June 30. They agreed that the central government will sue East Kalimantan provincial administration if it does not drop its lawsuit against KPC shareholders before July 31.
East Kalimantan last year sued Rio Tinto and BP Plc for US$776 million in the South Jakarta district court accusing them of blocking it to become the preferred bidder for KPC shares. As a result, the court seized assets of Rio Tinto and BP Plc.
The central government has decided that KPC shares will be sold to state companies, Indonesian private investors and East Kalimantan.
KPC, equally owned by Rio Tinto and BP, operates a huge coalmine in Sangatta in East Kutai Regency, East Kalimantan.
A significant portion of KPC?s coal are for exports. (alex/leo)