KPC will not give priority to East Kalimantan government

PT Kaltim Prima Coal (KPC) says that the coal mining company will not give any priority or exclusive rights to the East Kalimantan government to buy up to 51 percent of its stake.

KPC will, instead, pay attention to the bidding of the companies which meet the coal mining company?s offer including the prices, KPC president Noke Kiroyan told the East Kalimantan prosecution office on Wednesday.

Kiroyan was summoned by the public prosecutor after East Kalimantan governor Suwarna charged the company?s management of barring the local government from buying the company?s shares in its mandatory divestment.

The delay in the divestment has prevented the local government from benefiting the company?s profits. For this reason, the governor plans to seek compensation totaling US$766 million from the company.

As part of the mandatory divestment, KPC is required to sell up to 51 percent of its shares to local companies. However, the divestment has been delayed, as bidders consider the price for the shares are too expensive.

Legal experts have criticized the East Kalimantan?s move. KPC?s legal consultan Todung Mulya Lubis said that the local government?s charge lacked legal basis.

As the divestment process is still going on, the company has no obligation to pay any forms of dividend to any bidders including local government, he said.

Noted economic observer Didik J. Rachbine said that the East Kalimantan governor?s legal action was not rationale and was against the privatization program planned by the government. (*)