Total files complaint over delayed project
Fabiola Desy Unidjaja, The Jakarta Post, Jakarta
With its bankruptcy trial in progress, Total E&P Indonesie has filed a complaint to the Indonesian National Board of Arbitration (BANI) over its US$12 million in loses caused by delays to a construction project by its contractor PT Sanggar Kaltim Jaya (SKJ).
Citing the contract, Total claimed that the contractor had to bear all possible losses due to delays in construction projects caused by the subcontractor or third parties.
Total lawyer Fredrik J. Pinakunary told a press conference on Monday that the contract also stipulated that any dispute between Total and the contractors that could not be settled amicably should be settled through arbitration under the Rules of Arbitration of the Indonesian National Board of Arbitration (BANI).
"This matter is mentioned in the contract. The contractor has, in fact, failed to meet requirements as stated in the contract to complete the construction project," he said.
SKL had been named to construct platforms and a gas processing plant at the Tunu field, and a pipeline at the Peciko field, both of which supply the PT Badak plant in East Kalimantan.
Total -- a local affiliation of the world's second-largest gas producer Total SA -- is facing a bankruptcy petition from PT SKJ along with subcontractor PT Istana Karang Laut (IKL). IKL is the first plaintiff in the bankruptcy petition, while SKJ is the second, despite its former position as Total's main contractor for the project.
An audit by the Development Finance Comptroller (BPKP), revealed during the bankruptcy trial, claimed that Total was obligated to pay some US$3.952 million in compensation to SKJ and $3.178 million to IKL.
Total's production -- an average of 2.39 billion cubic feet of natural gas per day in 2004 -- has made it the biggest gas producer in Indonesia.
The contractor's lawyer OC Kaligis said Total's complaint to BANI was baseless, saying it was only a move to influence the ongoing trial at the Jakarta Commercial Court.
He claimed that he had not yet been informed about the complaint but emphasized that it was Total's right to file its report.
"They don't have any proof, but it's their right to proceed with the complaint. We are thinking of turning this into a criminal case because they are lying," Kaligis told The Jakarta Post.
He said the complaint to BANI was presented as additional legal evidence by Total during the trial on Monday.
The bankruptcy case is now in its last session with both parties presenting evidence before the court. They will read their conclusions on Wednesday before a verdict is handed down on March 7.
During the trail, Total's defense team presented additional evidence, including letters from Kutai Kertanegara regency administration and legislative council that stated that Total contributed some 35 percent to the regency's budget.
"We hope the court will take our interests into account in order to ensure security and stability in our regency before it issues its verdict," stated a letter from Kutai council speaker Bachtiar Effendi that was read out during the trial.