OPIC payment pending "green light" from PLN lawyers

The Indonesian government will pay the US$260 million claim from the U.S. Overseas Private Investment Corporation (OPIC) only after getting "green light" state electricity company PT PLN's lawyer, Cleary, Gottlieb, Steen & Hamilton (CGSH) in New York, Kompas daily reported on Saturday.

Thus far, PLN's lawyers were negotiating with OPIC over a definitive agreement over the payment of the claimed signed by then caretaker minister of finance Rizal Ramli, the signing of which has driven furor in the country.

The re-negotiations are the follow-up of a letter sent by the Finance Minister of August 6, 2001, urging OPIC to again re-negotiate a number of clauses in the agreement because it did not accommodate a number of clauses in Term Sheet signed by Rizal's predecessor Prijadi Praptosuhardjo.

"In accordance with any signing of a contract in a good faith, both parties need reservations presented by the other party, with or without any pressure in the signing of the contract," said one source at the Finance Ministry.

Earlier, PLN president Eddie Widiono said that PLN's team of lawyers have questioned the signing of the definitive agreement on the payment of the $260 million claim, with a total payment period of 14 years, with 3 years grace period and with interest rates of 6.125 percent per annum.

The House of Representatives' Commission IX deputy chairman Faisal Baasir also said earlier that the commission would summon Rizal Ramli over his signing of the agreement when he was caretaker finance minister.

OPIC claim arises following PLN's lost in the international arbitration panel to MidAmerican Energy over the cancellation of two geothermal power plants, Dieng and Patuha. (*)