Pertamina may accept surety bond

The state-owned oil and gas firm Pertamina may finally allow local contractors and suppliers to provide a surety bond - an insurance product - as an alternative to bank guarantee when participating a tender process at the company, the East Kalimantan Kaltim Post daily reported on Wednesday.

The paper quoted public relations chief of the Indonesian Insurance Council (DAI) Syahrun Lubis as saying that the new plans followed a recent strong protest from Pertamina contractors and suppliers in Balikpapan.

Syahrun said that Pertamina president Baihaki Hakim had informed him about the new plans.

Contractors and suppliers of Pertamina had protested the company's decision to reject surety bond and required a bank guarantee to participate in a tender process in the company or foreign oil and gas firms. The protesters said that the decision was against the ruling of the Finance Ministry which allows the surety bond as an alternative to bank guarantee.

Pertamina had rejected the surety bond because some insurance firms had declined or failed to pay claims on unsuccessful projects. (*)