Pertamina will audit assets of Karaha Bodas
Wednesday, May 15 2002 - 04:03 AM WIB
"If there is new proof from the audit, it will be raised again at the arbitrary body. Our fight against its decision has not ended," Pertamina?s president Baihaki Hakim said as reported by Kompas on Wednesday.
According to Baihaki, the arbitrary body?s decision was not fair and legally defected because the decision was made when the Jakarta district court was still processing the legal fights between Karaha Bodas and the state owned oil and gas company.
In its plenary decision, the International Arbitrary Body recently ordered Pertamina recently to pay compensation worth US$261 million to Karaha Bodas Company LLC (KBC) for the suspension of the latter?s geothermal power project.
The Karaha Bodas project is one of dozens of mega projects which were suspended by the government after the financial crisis hit the country in late 1997. The government, however, revoked the decision in 1998 after protests from developers, Caithness Energy, Florida Power, Japan Tomen Power and their local partner PT Sumarah Daya Sakti. But in early 1998, the government again issued a decree to re-suspend the project.
Not happy with the decision, the developers then sued Pertamina on the behalf of the government through the International Arbitrary Body, which then issued a ruling in favor of the Karaha Bodas developers. Pertamina and PLN were asked to pay a compensation of US$261 million but the state-owned oil and gas company refused to settle the payment.
Karaha Bodas won an approval from the government in 1994 to develop the geothermal power project under a joint operation scheme with Pertamina. At the same year, the American company also won a contract to sell the electricity to be produced from the Karaha project to PLN. (*)