Hopewell suspends RI power project<\/p>\n
HONG KONG (AFP): Hong Kong-based Hopewell Holdings Ltd. said
\nWednesday it had suspended a huge power project in Indonesia
\nwhich may require it to make a provision of as much as US$420
\nmillion.<\/p>\n
It is the second setback faced by the infrastructure firm in
\nSoutheast Asia due to the regional financial crisis after the
\nshelving of an elevated railway project in Thailand.<\/p>\n
In a statement, Hopewell said it had issued a Force Majeure
\nnotice in relation to the Tanjung Jati B (TJB) power project in
\ncentral Java, Indonesia, on which construction began in 1996.<\/p>\n
A Force Majeure is an event outside the control of either
\nparty to a contract that may excuse it from fulfilling its
\nobligations, and the notice was served to Indonesian state-owned
\npower company PLN.<\/p>\n
Hopewell chairman Gordon Wu said the notice had been issued to
\nsafeguard Hopewell's investment in Indonesia, which is battling a
\nsevere financial crisis.<\/p>\n
\"The background to this notice is that current circumstances
\nin Indonesia have led to a loss of confidence amongst financiers
\nand\/or potential financiers to the TJB project..,\" the company
\nstatement said.<\/p>\n
The Hong Kong-based firm has an 80-percent stake in the
\nproject, and has incurred costs of about HK$4.8 billion (US$420
\nmillion) to date.<\/p>\n
\"The Board is currently considering making provisions against
\nsuch costs. The amount of provisions is still being finalized and
\nwill be announced as soon as possible,\" the company statement
\nadded.<\/p>\n
Hopewell said it would not make any further material
\ncontribution to the TJB project because it was not currently
\nknown how long the events of Force Majeure were likely to last.<\/p>\n
Wu, however, said: \"I believe the contract can be successfully
\ncompleted and we will continue to work closely with the
\nIndonesian parties to enable work on the project to resume as
\nsoon as possible.\"<\/p>\n
Hopewell's board believes the project will be successfully
\ncompleted once it receives renewed support and commitment from
\nfinanciers.<\/p>\n
The power project is a 1,320 megawatt coal-fired power plant
\nawarded on a build-own-operate basis. Hopewell has the right to
\noperate the plant for 30 years.<\/p>\n
Hopewell said the project originally scheduled for completion
\nin 2000 was 70 percent complete.<\/p>\n
The suspension was another blow to Hopewell following a
\nstalled elevated railway project in Bangkok.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/hopewell-suspends-ri-power-project-1447893297",
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"sponsor": "Okusi Associates",
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