PLN chiefs resign in protest over govt policy on Paiton
PLN chiefs resign in protest over govt policy on Paiton
JAKARTA (JP): President of state electricity company PT PLN
Adhi Satriya and the company's planning director Hardiv Situmeang
tendered their resignations on Monday in protest over the
government's handling of its dispute with independent power
producer (IPP) PT Paiton Energy.
Both made the decision after hearing that the government would
drop the lawsuit filed by the state company in the Central
Jakarta District Court and pursue efforts to seek an out-of-court
solution to the dispute.
"We have chosen to resign as we disagree with the government's
new approach, which we don't think will be effective," Adhi said
after meeting with Coordinating Minister for the Economy, Finance
and Industry Kwik Kian Gie, State Minister of Investment and
State Enterprises Development Laksamana Sukardi and Minister of
Mines and Energy Susilo Bambang Yudhoyono.
Kwik said the government had accepted the resignation of both
executives and would choose replacements.
He refused to elaborate on the government's plan to pursue an
out-of-court solution to the dispute.
"Don't ask me. Ask the President (Abdurrahman Wahid)," he
said.
The resignation of both executives occurs at a time when both
were enjoying success in leading PLN in a legal battle against
Paiton in the Central Jakarta District Court. Until the
resignation, Hardiv was chief of PLN's team of negotiators in
dealing with IPPs, including Paiton.
The Central Jakarta District Court has issued several rulings
in favor of PLN.
On Thursday, it ruled that it had jurisdiction to examine the
dispute, turning down Paiton's proposition that only an
international arbitrator had the right to examine the case.
On Dec. 2, the court issued an injunction to bar Paiton from
pursuing its arbitration litigation against PLN, threatening the
company with US$600 million in penalties if it failed to comply
with the order.
PLN sued Paiton in October this year following months of
unproductive negotiations on the change of the terms of their
power purchase agreements, particular those regarding the price
of the company's power supplies.
PLN demanded the court nullify the contract on the grounds
that it had been awarded by its former management in 1994 through
corruption, collusion and nepotistic practices.
Paiton, which has built a 1,230 Megawatt (MW) power plant in
Probolinggo, East Java, sells its power to PLN at the price of
between 5.5 cents and 8.5 cents per kilowatt hour (Kwh).
It is higher than the average price of 6.4 cents per Kwh set
by other independent power producers and much higher than PLN's
selling price of Rp 240 (about 3 cents).
Several legislators expressed strong concerns about the
government's new policy on PLN's disputes but praised Adhi and
Hardiv's courage in tendering their resignation.
"I salute Adhi for his consistency. But, I am really
disappointed by the government's move," chairman of the House of
Representatives' Commission VIII for mines and energy Irwan
Prayitno told The Jakarta Post.
Legislator Priyo Budi Santoso said he believed the United
States Ambassador to Indonesia Robert S Gelbard and Jewish
lobbies had pressured the President into dropping PLN's lawsuits
against Paiton.
Priyo called on the government to name Gelbard persona non
grata and appealed to Kwik, Laksamana and Bambang to resign.
Irwan said the Commission would summon the three ministers for
a hearing in the near future.
Paiton Energy is owned by Japan's Mitsui (32.5 percent),
Edison Mission of the United States (40 percent), General
Electric, also of the U.S. (12.5 percent) and local firm PT Batu
Hitam Perkasa (15 percent), which is controlled by tycoon Hashim
Djojohadikusumo. (jsk/03)