State administrative court nullifies E. Kalimantan?s indictment over KPC divestment

The Jakarta state administrative court (PTUN) on Friday nullified the indictment handed down by the East Kalimantan provincial administration against the central government over the divestment of the 51 percent stake in coal mining giant PT Kaltim Prima Coal (KPC), according to a government spokesperson.

PTUN argued the indictment submitted by East Kalimantan had not been adequate for the court to process it, the spokesperson of the Ministry of Energy and Mineral Resources, TA Nurwinakun told Petromindo.com.

The court argued the East Kalimantan administration?s complaints, filed to the court through its company PT Melati Bakti Satya, has nothing to do with the court?s tasks of handling violations of procedures within bureaucracy circles.

The court suggested that the East Kalimantan administration hand down its indictment to a civil court, according to Nurwinakun.

Last year, East Kalimantan filed to PTUN a suit against Energy and Mineral Resources Minister Purnomo Yusgiantoro and other ministry officials accusing them of colluding with KPC for delaying the divestment of KPC shares. The province also filed a legal suit against KPC in the South Jakarta district court for the same reason, demanding the company to pay it US$776 million for divestment delay.

East Kalimantan insisted that it become the preferred bidder for the 51 percent shares in KPC. The firm operates coal mines in the province?s Sangatta district.

The province?s move derailed negotiations between the Indonesian government and KPC on the divestment program.

The share divestment had initially been planned for completion last year, but it was delayed to March this year. Late in March, the government and KPC?s shareholders Rio Tinto and BP agreed to again delay the divestment to end-June.

Meanwhile, Rio Tinto and BP last month agreed with the Indonesian government on a US$822 million valuation of the entire Kaltim Prima Coal operation. But the two shareholders insisted that they couldn?t sell KPC shares until the legal fight with East Kalimantan was resolved. (Godang)