Wednesday, February 21, 2007

Who'll bear Lapindo's additional cost of Rp4 trillion?

The National Team set up to solve the hot mudflow disaster caused by Lapindo Brantas Inc's drilling in Banjar Panji-1 well, Sidoarjo, East Java predicted additional cost up to Rp4 trillion to rehabilitate some public infrastructures, but it's not clear yet on who will bear this cost.

Media quoted Basuki Hadimoeljo, chairman of the team, saying the additional cost is needed to finance the construction of new turnpike (Rp700 billion), general alternate roads (Rp300 billion), new railway (Rp450 billion), gas pipeline (Rp300 billion), land acquisition (Rp600 billion), and others.
The Rp4 trillion additional cost is on top of the Rp3.8 trillion compensation cost pursuant to President Decree issued last September. Lapindo has disbursed Rp1 trillion, the team claimed, and another Rp1.3 trillion should be disbursed till next month, to be followed by the remaining Rp1.5 trillion after March.
So far, the team has yet to come up with financing plan. But if government keeps its promise that Bakrie family would be responsible for all the costs, then we know what might be the next.
The family is in the process to sell significant shares in Kangean Block, one of the crown jewels of PT Energi Mega Persada. But the proceeds would not be used to finance the Lapindo disaster, I guess. The proceeds would go to creditor's coffers.

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