Court orders PGN to pay $17m to partner companies

The International Court of Arbitration (ICC) in Singapore ordered state gas distributor PT Perusahaan Gas Negara (PGN) to pay US$17.29 million (Rp 160 billion) to its partner companies, following a dispute over fees in a gas pipeline construction project.

The ICC ruled in favor of a group of contractors comprising PT Citra Panji Manunggal, PT Remaja Bangun Kencana Kontraktor and PT Winatek Widita, saying PGN had paid $17.29 million less than an agreed amount.

The court also ordered PGN to pay the arbitration costs of $215,000 and the contractors’ legal costs, worth $428,009.

The contractors group, grouped under CRW Joint Operation, worked on PGN’s $486 million project to build a gas pipeline stretching 195 kilometers from Grissik to Pagardewa in South Sumatra, which was finished in the late 2007.

PGN corporate secretary Wahid Sutopo said the company had calculated its project fees differently to the calculations of the CRW.

“However, we are firm in our stance that we paid the project fee properly. Our legal advisers are now studying the ICC ruling before we pursue further legal options,” Wahid told The Jakarta Post on Monday.
Wahid thus denied that all charges ruled by the court would be the company’s losses.