Australian firm has RI payment problems
Australian firm has RI payment problems
SYDNEY (Dow Jones): Australia's Energy Equity Corp., a
stakeholder in the Indonesian Sengkang gas and power project,
said yesterday that an Indonesian state-owned power company has
failed to pay two electricity bills in full.
Energy Equity said Perusahaan Listrik Negara (PLN) has only
partially paid a March invoice from the Sengkang Power project
due to be paid in full by July 10, leaving US$1.9 million owed to
the project.
An April invoice also has US$1.9 million outstanding, the
company said.
Energy Equity owns 47.5 percent of the US$220 million Sengkang
project in South Sulawesi. Its partners in the project include
U.S. power company El Paso Energy Corp. (EPG) with 47.5 percent
and Indonesia's PT Trihasra Sarana Jaya Purnama with 5 percent.
The Australian company said the project has complied with the
procedural and notice requirements of the Power Purchase
Agreement it has with PLN and has advised the Minister of Finance
of the overdue payments. The minister is the government's
representative as sole shareholder in PLN and guarantor of
payment obligations.
Energy Equity said PLN has indicated it intends to meet its
payment obligations, noting that "a joint inter-departmental
government team was established in June 1998 to find a solution
for PLN's financial difficulties, which have been exaggerated by
the continuing economic problems in Indonesia."
Lenders to the project have been advised of the payment
situation and have "indicated their continuing support" through
project completion, said Energy Equity. The project is 99 percent
finished.
At 0225 GMT, Energy Equity shares were down 1 cent at 57
cents. The broader market was off 1.0 percent.
Last month, Energy Equity denied that the power purchase
agreement was under threat after PLN unilaterally canceled
another company's agreement.
The Sengkang project has a U.S. dollar-denominated take-or-pay
agreement with PLN in which the power company is contracted to
buy at least 80 percent of the project's power output.
The Australian company has maintained that the contract is
protected by a government guarantee even though the former
government of President Soeharto has been replaced by a new one
headed by President B.J. Habibie.
Energy Equity's executive manager finance, Maurice Hayes, said
that the project has a letter of support from the Indonesian
government which it can call upon should PLN fail to meet a
future payment deadline.
The purchase agreement that was canceled by PLN didn't have
the backing of such a letter of support, he noted.