House supports Govt over dispute with OPIC

Members of the House of Representatives (DPR) have supported the government's decision to reject the payment over the claim worth some US$290 million paid by the U.S. government's Overseas Private Investment Corp (OPIC) to Calenergy International despite the U.S. government threat.

Priyo Budi Santoso and Pramono Agung, both members of the House Comission VIII which is in charge with investment, power and electricity, said the government should be consistent with its decision not to pay the claims eventhough it had to face the U.S. threat.

"The U.S.company has a bad history about its operation in Indonesia and it therefore is not deserved to receiving the claim from OPIC," Bambang said over the weekend in commenting U.S. Ambassador to Indonesia Rober Gelbard's statement over the Indoensian government's refusal to pay the claim.

Gelbard regretted the Indonesian government's decision and said that rejection would send a bad signal to foreign investors. He said that he would block U.S. investment to Indonesia if Indonesia continued to reject the claim.

OPIC, along with Kloyds of London paid Calenergy, more popularly called California Energy in Indonesia, the $290 million in full last November. The payment came after the U.S. power company lodged a claim under its political risk insurance with OPIC, after PLN failed to pay Calenergy a sum awarded it by an independent artbitration panel last year.

Calenergy filed arbitration proceedings against PLN in September in 1998 after the later refused to pay it for electricity from its geothermal power plant in Dieng, Central Java and the government's decision to suspend its other plant in Patuha, West Java.

Finance Minister Bambang Sudibyo said last week that the government had no money to pay the claim.

Priyo and Pramono said that Calenergy obtained its power contracts in Indonesia from the previous government through KKN, the acronym for corruption, collusion and nepotism and it was not deserved to receive the payment.

"We don't want the government to pay even a single cent for the claims and if ut does so, we certainly question the payment as the payment will involved taxpayers' money," Priyo said. (*)