Contractor sues Patuha Power for $1.3m

Contractor sues Patuha Power for $1.3m

JAKARTA (JP): Drilling company PT Boart Longyear has filed a
bankruptcy petition against Patuha Power Ltd, the owner of the
suspended Patuha power project in West Java, for failing to pay a
drilling service fee.

Boart Longyear finance manager Bernhard Leode said on Tuesday
that the suit was filed in Bermuda on Sept. 25 for US$1.3
million, including interest, in arrears. Boart Longyear is a
subsidiary of the West Africa-based Longyear Group.

"The first hearing of the case will be held on Oct. 13 in
Bermuda," Leode said. The suit was filed in the West Atlantic
island group because Patuha Power is registered there.

According to PLN data, Patuha Power is a consortium of giant
U.S. power company CalEnergy, holding the majority share, and
local firm Mahaka Energy.

CalEnergy Asia president and chief operating officer Donald M.
O'Shei recently said Patuha Power had terminated the development
of the 320-Megawatt (MW) Patuha geothermal power plant following
the refusal of its financiers to disburse further funds for the
project. The project was then 30 percent completed.

It is among 16 power projects shelved by the government in
September last year as part of its retrenchment measures to cope
with the monetary crisis.

The government allowed the project to continue in November
1997, but suspended it again last January.

CalEnergy has filed suit against the Indonesian government for
halting the project, saying the move contravenes its contract
with PLN.

Leode said if Patuha Power still refused to pay Longyear in
the Bermuda court for its drilling service, Longyear would take
steps to confiscate its asset in Indonesia.

CalEnergy's two other geothermal projects in the country are
in Dieng, Central Java, and Bedugul, Bali.

Local contractors which provided materials and services to
CalEnergy have also complained that Himpurna California Energy,
which is developing Dieng, has outstanding bills amounting to $40
million. (jsk)