Legislator angered by govt's move to pay OPIC claim

Legislator angered by govt's move to pay OPIC claim

Source: Koran Tempo daily, Jakarta

The decision by caretaker finance minister Rizal Ramli to disburse the payment for the U.S. Overseas Private Investment Corporation (OPIC) insurance claim of US$260 million has angered the chairman of the House of Representatives' Commission VIII on mining and energy, Irwan Prayitno, Koran Tempo daily reported on Saturday.

Irwan charged Rizal Ramli of making a move against President Megawati Soekarnoputri who had ordered caretaker ministers not to make any important decision until a new Cabinet is established.

Moreover, Irwan said, a number of legislators still refused the government's decision to pay OPIC claim, that related to allegedly graft-ridden power projects, Dieng and Patuha geothermal power plants.

Rizal Ramli and U.S. Ambassador to Indonesia Robert Gelbard reportedly signed a document on the payment of the claim on July 31.

Actually, the payment itself had been approved by the so-called Kepress-133 Team on electricity restructuring, which was chaired by then coordinating minister of the economy Rizal Ramli. At that time, then finance minister Prijadi Parptosuhardjo refused to pay simply because the government had no money.

The government obligation to OPIC and foreign bank creditors emerged after the government delayed the development of the Dieng and Patuha geothermal power plants following the country's 1997 financial crisis. U.S.-based Cal Energy was the contractor of the project.

OPIC, which covered the risk of Cal Energy's investment in Indonesia, then demanded the government of Indonesia to pay compensation for the delay. An international arbitration panel ordered Indonesia to pay OPIC some $260 million, and another $140 million to a group of Cal Energy's bank creditors.(*)