Pertamina may use govt funds for Karaha project
Wednesday, June 19 2002 - 04:55 AM WIB
But such a move would be taken only if no lender is willing to provide Pertamina with loans for the Karaha project, Roes Aryawijaya, deputy to the State Minister of State Enterprises, told Petromindo.Com.
?Pertamina could use government funds, and later repay the loans after the project starts operation. But this is just one of several alternatives,? Roes said.
The government had said earlier it would offer other investors to develop the Karaha Bodas plant if Karaha Bodas Company makes clear not to resume it. So far, Karaha has shown no sign to continue the project, and no other investor has expressed interest to carry it out.
Cayman Islands-registered Karaha Bodas Company, which is principally controlled by U.S. firms Florida Power Energy LLC and Caithness Energy LLC, is currently involved in a legal dispute with Pertamina and state power company PLN.
Karaha filed complaints to a Switzerland-based arbitration panel after the Indonesian government in 1998 unilaterally suspended a number of mega projects including the Karaha project in the wake of the country?s economic crisis.
The Swiss arbitration in 2000 ruled in Karaha?s favor, ordering Pertamina to pay it some US$261 million, saying that the amount was for the project costs and the loss of future profits related to the project. Karaha said it had spent $100 million on the facility.
Pertamina said however the $261 million was unreasonable. (godang)