Kwik: Negotiations between PLN and OPIC almost over

Coordinating Minister for Economy, Finance and Industry Kwik Kian Gie said that negotiations between the government, represented by state-owned electricity firm PT PLN, and the Overseas Private Investment Corporation (OPIC) has almost reached an agreement.

"I have received reports from Pak Kuntoro (Mangkusubroto, PLN president) and OPIC representatives also came to me (to report the progress)," Kwik said at the Bina Graha presidential office.

Kwik said he was surprised why the problem between PLN and OPIC became headlines again while at the same time, negotiations had almost reached an agreement.

The OPIC issue emerged into headlines following a threat from U.S. ambassador to Indonesia Robert S. Gelbard that the U.S. government would confiscate Indonesian assets abroad if the latter did not settle its debt to OPIC.

OPIC -- as a federal insurance firm that guarantees U.S. investment overseas -- asked the Indonesian government last March to pay US$290 in compensation claim that it had paid to California Energy/Mid American Energy Holding.

An international arbitration ordered PLN and the government to pay $500 million to the two U.S. energy investors for the former's decision to cancel the latter's energy projects in Indonesia, Patuha and Dieng. Out of the total claims, $290 was paid by OPIC.

Kwik said that the media should take Gelbard's words as they are because Gelbard was a temperamental person.

Meanwhile, Minister of Finance Bambang Sudibyo said earlier that the Indonesian government would not pay $290 million to OPIC because the government had not allocated any fund pay that claim. Besides, the contracts between PLN and Cal Energy/Mid American Energy Holding were made during the New Order government and tainted by corruption, collusion and nepotism practices. (*)