Firms seek U.S. govt help in dispute with CalEnergy

Firms seek U.S. govt help in dispute with CalEnergy

JAKARTA (JP): A group of local contractors who have supplied
materials and services to giant U.S. power company CalEnergy
Company Inc's power projects in Indonesia, have asked the U.S.
government to help them recover payments amounting to US$40
million from the company.

Samuel Sahetapy, president of PT Daya Alam Teknik Inti, one of
the contractors, said on Wednesday that CalEnergy's Indonesian
subsidiaries had missed 10 months of payments amounting to US$40
million for the materials and services provided by local
contractors for the company's power projects in Dieng, Central
Java, Patuha, West Java and Bedugul, Bali.

He said some of the contractors had asked the U.S. embassy in
Jakarta to help them procure the payment.

In response, the embassy asked them to write a letter to the
U.S. government private-sector financing and insurance arm, the
Overseas Private Investment Corporation (OPIC), to ask the agency
help settle the case.

"We shall write the letter soon," Samuel said.

CalEnergy is developing the 400-Megawatt (MW) Dieng geothermal
plant through its subsidiary Himpurna California Energy Ltd,
which is a joint venture between CalEnergy and PT Himpurna
Enersindo Abadi, a business unit of the Himpurna foundation of
retired military members.

The 320-MW Patuha power plant is being developed by Patuha
Power Ltd, a consortium of CalEnergy and PT Mahaka Energy Ltd.

The 320-MW Bedugul power plant is being developed by Bali
Energy, a subsidiary of CalEnergy and PT Pandanwangi Sekartaji.

CalEnergy has completed the development of the first unit of
the Dieng power plant with a capacity of 60 MW and it has been in
operation since March. The Bedugul and Patuha projects are still
under construction.

Samuel said the local contractors which had provided services
and materials to the power projects had tried to get the payment
themselves, but their efforts had been fruitless.

Twenty two contractors then agreed to team up to put pressure
on the company to pay its debt, Samuel said.

T. Iskandar, director of another CalEnergy supplier PT
Mekarindo Permai, said they had filed complaints with the holding
company of CalEnergy Company Inc. in Omaha, Nebraska, but it said
it was not responsible for its subsidiaries' failure to meet
their financial obligations.

He said under contracts, the contractors could sue CalEnergy
subsidiaries at the arbitration courts in Singapore and
Switzerland, but they were reluctant to do so, due to the time
and costs involved.

"We are really in a very weak position," Iskandar said.

CalEnergy filed suits on Aug. 14 at the United Nations
Commission on International Trade Law (UNCITRAL) against the
state electricity company PLN and the Indonesian government for
failure to pay for power supplies from its Dieng power plant,
since the start of operations in March.

It said monthly power supplies from the plant cost between
US$4.5 million and US$5 million.

The company also sued the Indonesian government for suspending
its geothermal power project in Patuha, arguing the action was in
conflict with the contract and it had made its financiers suspend
disbursement of funds for the project.

The government shelved 16 of 26 power projects in September
last year, including the Patuha and Bedugul projects, in a
retrenchment effort to cope with the monetary crisis.

CalEnergy was allowed to continue developing a power unit at
the Patuha power project with generation capacity of 80 MW in
November last year, but it was suspended again in January this
year.

Beby Senjaya, director of Kharisma Citra Manunggal, said
CalEnergy has made PLN's failure to pay its power and the
cessation of financial flow from its financiers an excuse for the
delay in making payments on materials and services it has
received from contractors.

"We can't accept such an excuse, since the contracts are
between us and CalEnergy and have nothing to do with its
relations with PLN," Beby said. (jsk)