Govt's move over Paiton regretted

Govt's move over Paiton regretted

JAKARTA (JP): The House of Representatives and the People's
Consultative Assembly expressed regret on Tuesday over the
government's decision to drop the lawsuit against independent
power producer (IPP) PT Paiton Energy.

House Speaker Akbar Tandjung said the House would summon the
government to clarify its decision and the subsequent
resignations of state-owned electricity company PT PLN president
Adhi Satriya and planning director Hardiv Situmeang.

The two PLN executives tendered their resignations to protest
the government's decision to drop the lawsuit.

Akbar praised Adhi for his efforts to root out traces of
corruption, collusion and nepotism in the power purchase
agreement (PPA) awarded to Paiton.

"The legal process is necessary to free PLN from traces of
KKN," Akbar said, using the acronym for corruption, collusion and
nepotism.

He said the government should immediately choose a replacement
for Adhi and take measures to resolve PLN's dispute with other
IPPs.

Separately, Amien Rais, the speaker of the People's
Consultative Assembly, said he suspected foreign powers were
behind the resignations of the PLN executives.

"Indonesia must reject any foreign powers dictating the
country's economic, social and political policies.

"We don't want any Indonesian to serve foreigners at the
expense of national interests," Amien said.

Adhi and Hardiv announced on Monday they were tendering their
resignations to protest the government's decision to drop the
lawsuit PLN had filed in the Central Jakarta District Court
against Paiton.

The lawsuit was filed in October of this year to annul the PPA
which was awarded by PLN's former management to Paiton in 1994.
The suit claimed the contract contained elements of corruption
and the price of the power supplies from the company was too
high.

Adhi and Hardiv's resignations come just as the two were
beginning to enjoy some success in leading PLN in its legal
battle against Paiton. The Central Jakarta court recently issued
two rulings in favor of PLN.

Meanwhile, House Commission VIII for mines and energy plans to
form a special committee to investigate the dispute between PLN
and its IPPs.

Commission chairman Irwan Prayitno said the committee would
examine PLN's contracts with the IPPs, which he said showed
strong indications of corruption.

"We'll try to get to the root of the dispute between PLN and
the IPPs before advising the government on its plan to negotiate
with the IPPs," Irwan said during a media briefing.

President Abdurrahman Wahid issued a decree on Saturday which
outlined the formation of a team to resolve PLN's disputes with
the IPPs.

Adhi repeated on Tuesday his suspicion that the government had
been pressured by the government of the United States to drop the
lawsuit against Paiton.

Adhi said the decision to drop the suit was not transparent,
adding that he did not foresee the government obtaining any
concessions from Paiton in return for its move.

Paiton Energy is owned by Japan's Mitsui, General Electric of
the United States and local company PT Bukit Hitam Perkasa. It
has constructed a US$2.5 billion power plant in Probolinggo, East
Java.

Meanwhile, Paiton welcomed the government's announcement it
was dropping PLN's lawsuit, adding that it was looking forward to
future discussions with the government.

"Paiton understands that the government of Indonesia has
announced its intention to become directly involved in the
efforts to resolve the contractual issues with all IPPs," a press
release from Paiton said. (03)