What became of the SAAR?

What became of the SAAR?

With regard to the claim made by the Overseas Private
Investment Corporation (OPIC), the government has decided to go
back to the terms of reference earlier agreed upon. Minister of
Finance Boediono said yesterday (Thursday) in Jakarta that the
new agreement regarding the claim was signed last Monday.

This decision deserves to be welcomed. The previous agreement
-- known as the Settlement Agreement, Assignment and Release
(SAAR) -- which was signed by the former Finance Minister, Rizal
Ramli, when he was already in a caretaker position, placed
Indonesia in a difficult position.

This previous agreement required Indonesia to pay the sum of
US$260 million (about Rp 2.3 trillion) in compensation to OPIC in
connection with the delay of the (geothermal) power projects in
Dieng and Patuha. OPIC submitted its claim after having won the
case at a court of arbitration. With this country's (debt)
obligations already piled up high and the budget under heavy
pressure, the government would find it extremely difficult to
settle the claim.

One question remains: What will happen to the SAAR. The
government will somehow have to explain this matter, and explain
not only the agreement's present status. Even more important is
how the SAAR came to be signed. The impression is that it was
done in haste and that intervention occurred by parties not
relevant to the issue (U.S. Ambassador Robert Gelbard was present
at the July 31 signing ceremony at the Ministry of Finance.)

Left unexplained, the question will continue to linger and the
government would be needlessly throwing away a portion of its
credibility.

-- Koran Tempo, Jakarta