Paiton and PLN

Paiton and PLN

Thank you for your story headlined "Paiton Energy dismayed by
court's decision" of Dec. 4.

There was a mistake and misperception in the story that needs
to be corrected.

Regarding the lawsuit of the State Electricity Company (PLN)
against Paiton Energy, you stated that the "court made the
provisional ruling at the request of PLN, which had sued Paiton
at the court following the latter's refusal to renegotiate with
the state company on its power purchase contract."

That is incorrect. Paiton Energy and PLN were in the midst of
renegotiations which progressed significantly toward a settlement
when PLN surprised us by abruptly breaking off discussions and
filing suit at the Jakarta Central District Court.

Paiton has always been willing to renegotiate its contract
with PLN. In spite of PLN's legal efforts, we reaffirm our
preference to resolve our issues through negotiation rather than
litigation or arbitration, all as part of our ongoing commitment
to help the government and people of Indonesia through the
current economic difficulties.

To this end, we have time and again provided concessions to
PLN, which they have unfortunately rejected.

RONALD LANDRY

President Director

PT Paiton Energy

Jakarta