PJB demanded to pay US$4.2m damages for breaching contract

Columbia Turbo and Engineering, a supplier of power plant equipment, has demanded PT Pembangkit Jawa dan Bali (PJB), a subsidiary of the state owned electricity company PLN, to pay damages up to US$4.2 million for breaching a contract on the supply of electricity parts to PJB's three power plants, Investor Daily reported on Thursday.

PJB's president director Samiudin admitted on Wednesday that its supplier Columbia Turbo had formally lodged its complaint. "The damages sought by Columbia is about 10 percent of the value of the contract which is worth US$42 million," he told a hearing with members of the House of Representatives.

He said that Columbia, a representative of the Swiss-based Wood Group Heavy Industrial Turbine AS, had also threatened to take the case to the International Arbitrary if PJB failed to meet its demand.

According to him, PJB refused to pay the damages requested by Columbia because the company had not supplied all of the electricity parts stated in the four-year contract, which was signed in January, last year.

The dispute began when PJB cut the contract, and named another company Alstorm to supply electricity parts to its three power plants. Samiudin said that the contract was terminated because PJB, which operates a number of power plants in Java and Bali, was allowed only to use genuine parts for its power plants. (*)