Presidential decree on power project suspension to be revoked soon: Purnomo

The government will immediately revoke the 1998 presidential decree on the suspension of several power projects as part of efforts to avoid costly lawsuits launched by independent power producers, according to Minister of Mineral Resources and Energy Purnomo Yusgiantoro.

Purnomo also said Wednesday that the government was still trying to seek an out of court settlement over dispute with independent power producer PT Karaha Bodas Company, the developer the 2x110 MW Karaha Bodas geothermal power plant in West Java, which is one of the power projects suspended by the government in the wake of the 1998 regional financial and economic crisis.

He said that international arbitration ruling issued in November last year, requiring the state-owned oil and gas firm Pertamina to pay some US$261 million in compensation to Karaha Bodas for the project suspension was not yet final.

He said that another hearing of the case will be opened in New York next month.

The shareholders of the US$380 million Karaha Bodas project include Florida Power & Light (40.5%), Caithness (40.5%), Tomen Corp of Japan (9%), PT Sumarah Daya Sakti (10%).

The government has offered Karaha to resume the project, following the arbitration ruling. But so far Karaha rejects the offer, demanding instead Pertamina to honor the arbitration ruling and pay compensation.

Previously, the state-owned electricity firm PLN had been ordered by international arbitration panel to pay some $260 million in compensation to OPIC, which insured the suspended Dieng-Patuha power project.(Amoros)