Legislators ask Pertamina not to pay KBC's claim
Tuesday, February 22 2005 - 03:18 AM WIB
In the request, which was made by the legislators after a hearing with Pertamina on Monday, the Commission IX said that the government and Pertamina had no reasons to pay the claim because the suspension of KBC's geothermal project during the late 1990s was made upon the recommendation of the International Monetary Funds (IMF).
The legislators also asked the government to further investigate the alleged tax frauds carried by KBC and to submit the fraud case as new evidence in the alleged corruption charges conducted by the KBC management.
At the hearing, Pertamina's president Widya Purnama would continue to seek an out of the court settlement in dealing with KBC's claim. "Pertamina is ready to pay the claim according to the existing regulation. But we don't want to pay the claim if it also includes compensation for the lost of opportunities suffered by KBC," he added.
He said that based on the calculation of an independent appraiser from Italy, KBC's geothermal project was valued only at about US$50 million. "If KBC insists us to pay compensation in full, we will sue KBC for corruption through the US corruption court,"he said.
Widya said that Pertamina was making any possible efforts to withdraw the funds amounting to US$325 million frozen in the Bank of America as the guarantee for the claim payment. He said that of the total funds, only US$25 million are owned by Pertamina, while the Indonesian government own the other US$300 million.
Karaha Bodas sued Pertamina on the behalf of the government through the International Arbitrary for the suspension of its geothermal project in Karaha, West Java in 1997. In 2000, Pertamina were then asked to pay a compensation of US$261 million but the state-owned oil and gas company refused to settle the payment. The amount of the claim has swelled to over US$300 million due to the accumulation of interest and penalty.(*)