Govt refuses to pay KBC
Tuesday, July 20 2004 - 03:45 AM WIB
Laksamana said that it was Pertamina which should pay the claims.
"If it (the KBC claims) is to be paid, the money should come from Pertamina, not the government," he was quoted by the paper as saying.
Pertamina's subsidiary in Hongkong, Pertamina Energy Trading Ltd (Petral) and its assets have been confiscated as part of Karaha Bodas Company's hunt for the assets of the state owned oil company. The Singapore court had also seized Petral office in Singapore for a similar purpose.
KBC through its lawyers had asked Pertamina to pay US$15 million for Petral Hongkong and another US$20 million for Petral Singapore to prevent the two subsidiaries from being liquidated.
"It is up to the government to decide whether or not we will pay the compromise claim, We will do whatever the government tells us," Pertamina's president Ariffi Nawawi said. "Pertamina has no plan to pay the claim, but if it was asked to do so, we will do it," he added.
Karaha Bodas sued Pertamina on the behalf of the government through the International Arbitrary Agency for the suspension of its geothermal project in Karaha, West Java in 1997. Pertamina were then asked to pay a compensation of US$261 million but the state-owned oil and gas company refused to settle the payment.
Karaha Bodas Company's claim to Pertamina sharply increased to US$290 million at the end of 2003 from only about US$262 million due to the accumulation of interest payment.
The Karaha Bodas project is one of dozens of mega projects, which were suspended by the government after the financial crisis hit the country in late 1997. The government, however, revoked the decision in 1998 after protests from developers, Caithness Energy, Florida Power, Japan Tomen Power and their local partner PT Sumarah Daya Sakti. But in early 1998, the government again issued a decree to re-suspend the project. (*)