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Dwi Mustika sues PGN subsidiary over Kalimantan-Java gas pipeline project

JAKARTA ( – PT Dwisatu Mustika Bumi and PT Berkah Mirza Insani has filed lawsuit against PT Kalimantan Jawa Gas (KGJ), the owner of the 207-kilometers Kalimantan-Java (Kalija) gas pipeline, linking Kepodang Block in offshore Jepara and gas-power plant (PLTGU) Tambak Lorok in Central Java. The project is worth US$85.7 million.

Kontan daily reported KJG and the consortium signed the subcontract to build the pipeline on August 26, 2014. However, the contract was terminated on Oct. 27, 2014 after the consortium failed to submit project guarantee as required by the contract. Under the contract, the consortium is required to pledge project guarantee worth 10 percent of the total contract value.

PGN spokesperson Irwan Andri Atmanto said KJG has extended the period for the consortium to submit the required project guarantee, however, it failed to meet the deadline. PGN has a commitment to complete the project by 3rd quarter of 2015.

As a result, the consortium filed a lawsuit with the Central Jakarta District Court on Dec. 10, 2014. They seek compensation worth US$85.7 million or around Rp1 trillion for the contract termination.

Djuhair Hasan, external relation department officer of Dwisatu said the hearing of the case will be held on March 24, 2015. (*)



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