Siwani threatens to sue Pertamina if projects cancelled

Publicly listed PT Siwani Trimitra Tbk (MITI) has threatened to take Pertamina to arbitration if the state-owned oil and gas company cancels the four fuel infrastructure projects awarded to MITI, Bisnis Indonesia reported on Thursday.

Diah Pertiwi Gandhi, MITI?s corporate secretary said in Jakarta on Wednesday that the four projects initially worth about $500 million could not be cancelled because they were built under a build and rent contract.

?The build and rent contract could not be cancelled by Pertamina because we are also involved as an investor,? she said, adding that if Pertamina cancelled the projects, MITI would take the case to arbitration.

The four projects, respectively for the contraction of three fuel depots in Jakarta, Bali and Surabaya, and a fuel transit terminal in Kuala Tanjung, were initially awarded to Singapore-based L& M Group Investment. Later projects, which were taken over by MITI in a return for the latter?s shares. The transaction has raised L & M?s stake in MITI to 76%.

The four projects which were initially estimated to cost some $500 million have almost been completed with total cost of about $56 million. The fuel distribution infrastructure projects were built by L& M?s affiliate Pandanwangi.

Pandanwangi and Pertamina have appointed independent auditor Arthur Andersen to audit the projects due to dispute over their value. The audit is scheduled for completion in November. (*)