Japan to check if PGN qualified for Miyazawa loan

A Japanese company will arrive here on Wednesday to examine whether state gas distribution company PT Perusahaan Gas Negara (PGN) is qualified to accept soft loans from the Japanese government for its gas pipeline project linking South Sumatra and West Java.

"The Japanese company will arrive here on Wednesday for a final check," PGN's president Qoyum Tjandranegara said on Monday, but he did not name the company.

Qoyum was speaking on the sidelines of the ceremony to award the International Certification Organization ISO-9002 for PGN's headquarters and branch offices in Medan, Cirebon and Surabaya.

Qoyum said the project was worth US$850 million, 15 percent of which would be provided by the state company with the remaining 85 percent expected from the Japanese government.

The loan would be channeled through a consortium of Japanese banks including Mitsubishi, Itochu, Sumitomo, Qoyum said.

The Japanese government has launched a multibillion-dollar soft loan package called the Miyazawa Plan to help the Asian countries continue its infrastructure projects amid the economic crisis.

The South Sumatra-West Java gas pipeline project is one of the projects proposed by the Indonesian government to be financed under the Miyazawa Plan program.

PGN's spokesman Harri Siswadi told Petromindo.Com that the Japanese government had not yet made any decision whether to provide loans for PGN's pipeline project.

Qoyum said if the Japanese government agreed to provide the loan, PGN would start the project in mid-2001 and complete it in two years.

The gas pipeline will be used to send 600 million cubic feet of gas per day from gas fields in South Sumatra to industries and households in West Java, he said. (godang)