KS-Posco settles land dispute with Cilegon municipal government

PT Krakatau Posco, a joint venture between state steel company PT Krakatau Steel (KS) and South Korean steel producer Posco, will go ahead with its plan to build a US$6 billion steel plant Cilegon, Banten after the company and the Cilegon municipal government have agreed to settle their dispute over the land allocated for the steel plant complex, Bisnis Indonesia reported on Saturday.

Under the agreement signed by president director Fazwar Bujang and Cilegon mayor Tb Iman Ariyadi, KS would hand over 45 hectares of land to the municipal government in compensation for approval to use land for the plant site of KS-Posco.

The Cilegon municipal government would allow KS-Posco to use a 66.5 hectare of land located within KS?s 388-hectare industrial complex. The municipal government previously claimed the ownership of the 66.5 hectare land.

As part of the deal, KS also agreed to compensate the municipal government for the budget it had spent for the construction of a port in the Kubangsari area located within the 66.5 hectare land. The compensation is estimated to reach Rp 105 billion but the actual value will be determined following the government?s audit. (*)