Indonesia will settle OPIC's claim: Sukardi<\/p>\n
JAKARTA (JP): State Minister of Investment and State
\nEnterprises Development Laksamana Sukardi said on Friday that
\nIndonesia would negotiate with the American government or the
\nU.S. Overseas Private Investment Corp. (OPIC) over the claim it
\npaid to Calenergy International.<\/p>\n
"Indonesia wants to solve the case through negotiations,"
\nLaksamana said on the sidelines of a seminar.<\/p>\n
Laksamana apparently made the statement to calm jitters among
\ninvestors caused by finance minister Bambang Sudibyo's statement
\nearlier this week that the government had no money to pay the
\nclaim.<\/p>\n
Bambang said Indonesia would not reimburse OPIC for the US$290
\nmillion it paid to Calenergy last November.<\/p>\n
The claim was made after state electricity company PT PLN
\nfailed to pay Calenergy a sum awarded to the latter by an
\nindependent arbitration panel.<\/p>\n
Bambang said the contract, negotiated under the Soeharto
\nregime, was corrupt and Indonesia could not afford to pay it.<\/p>\n
Laksamana did not, however, specify as to how the government
\nwould settle the claim. He said the most important thing was that
\nthe government would negotiate with OPIC in line with its
\ncommitment to honor international contracts.<\/p>\n
Calenergy filed arbitration proceedings against PLN in
\nSeptember 1998 after the latter refused to pay for electricity
\nfrom its geothermal power plant in Dieng, Central Java and after
\nthe government suspended its other plant in Patuha, West Java.<\/p>\n
PLN was ordered to pay $572 million by an independent
\narbitration board last year but it refused to do so, forcing
\nCalenergy to call in its OPIC insurance.<\/p>\n
The claim paid out by OPIC then became the responsibility of
\nthe host country's government, making the money paid to Calenergy
\neffectively an Indonesian government debt.<\/p>\n
Dow Jones Newswires quoted American documents as saying that
\nOPIC might have to seize Indonesian assets abroad if the
\ngovernment failed to settle the claim.<\/p>\n
The U.S. ambassador to Indonesia, Robert Gelbard, told Dow
\nJones Newswires earlier this week that his government was
\n"dismayed" at Bambang's assertion that it won't repay OPIC for
\nthe claim paid to Calenergy.<\/p>\n
Gelbard argued that the move could affect future investment in
\nIndonesia just as the four-month-old government was trying to
\nreassure foreign investors.(udi)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indonesia-will-settle-opics-claim-sukardi-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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