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)