Top officials differ on OPIC payment
Wednesday, May 16 2001 - 04:30 AM WIB
In a show of a lack of coordination, Finance Minister Prijadi Praptosuhardjo and Director General of Budgetary Affairs Anshari Ritonga yesterday differed on a payment of US$260 million to a US insurance arm of the Overseas Private Investment Corp. (OPIC).
While Prijadi said the government's decision to pay OPIC claim was final, Anshari said it was not final yet and was still being studied.
"It's final. Additional requirements will be put through by the government to PLN," Prijadi told Parliament, referring to the debt-laden state utility company Perusahaan Listrik Negara PLN.
The dispute started in 1997 when the government scrapped the Dieng-Patuha power generator project due to the outbreak of the economic crisis.
OPIC is the insurance guarantor of US companies managing the power project.
Chief economics minister Rizal Ramli said the government made the decision to pay the claim to maintain a good relationship with Washington.
Anshari said his office never even received a proposal for the payment of OPIC claim.
"It needs further calculation? especially because the money is not budgeted yet," Anshari said.
"If it must come from the state budget, then we have to seek the financial sources first."
Anshari said the government is determined to pay the claim.
"A state debt is a debt that must be repaid. What's important is to find a solution to repay it," he said.
Prijadi, meanwhile, said he didn't know whether the claim would be paid through the state budget or not. "That I still don't know."
Most power projects signed by the corrupt New Order regime have been accused of massive markup practices, resulting in a huge burden shouldered by the government and the public.
The current government, however, has pledged to honor all those contracts made in the past.
In addition to the OPIC claim, the government must also settle other claims amounting to US$282 million by December 31, 2001 at the latest.
Late Monday, Energy and Mineral Resources Minister Purnomo Yusgiantoro said the OPIC claim payment has nothing to do with the state budget because it would be installed in accordance with the Paris Club debt settlement scheme. (*)