Petrobuild may sue govt over building project

JAKARTA (JP): PT Petrobuild Indonesia, the winner of a tender to construct an oil and gas center in Jl. MH Thamrin in Central Jakarta, plans to sue the Ministry of Mines and Energy if a dispute over the building contract is not resolved fairly.

"The ministry granted a license to PT Pembangunan Perumahan to take over the construction of the center before settling its legal dispute with us. This is against our agreement," Petrobuild's president, Syarief Tando, said yesterday.

The ministry awarded the contract to Petrobuild in 1993 and signed with the company a 30-year building, operating and transfer (BOT) contract agreement later that year.

The ministry revoked the contract last month and licensed Pembangunan Perumahan to take over the construction. The ministry said Petrobuild had failed to comply with the agreed construction schedule, had no equity and failed to obtain bank loans for the project.

Syarief denied the ministry's accusations, saying that the construction is on schedule and his partners -- PT Meta Epsi Duta Co. and PT Bakrie Investindo -- had stated their willingness to inject a total of US$45 million into the development.

"We also have a paid capital of $12 million and the state- owned Bank Bapindo was going to provide us with a loan of about $100 million," he said, adding that construction of the center was estimated to cost $150 million.

T. Mulya Lubis, of the Indonesian Legal Association, is supporting Syarief's case.

"The BOT contract is irrevocable," he said.

Based on the contract, any problem arising between Petrobuild and the ministry must be resolved by the two sides through deliberations aimed at achieving consensus, Lubis said. If such deliberations fail to reach a consensus, the dispute should be decided through legal channels.

"Petrobuild is asking the ministry to solve the problem through deliberation. But if we fail, we will take it to court," he said.

Lubis said Petrobuild has already invested about US$15 million in the center's construction. Petrobuild is also willing to cooperate with a consortium appointed by the ministry to continue the construction, he added. (bnt)