Dari milis tetangga.... Wass, >Date: Wed, 02 Jul 2003 09:53:49 -0500 >From: "Istadi, Bambang P" <[EMAIL PROTECTED]> >Subject: [Iatmi_houston] FW: [Oil&Gas] FW: Listrik mahal - Inilah rahasianya >To: [EMAIL PROTECTED] >Reply-to: [EMAIL PROTECTED] > > >Dari milis Migas Indonesia,... > > >Bambang Istadi >ConocoPhillips Inc. >New Ventures Exploration >+1-281-293-3763 >-----Original Message----- >From: Desmawati [mailto:[EMAIL PROTECTED] >Sent: Wednesday, July 02, 2003 12:16 AM >Subject: [Oil&Gas] FW: Listrik mahal - Inilah rahasianya > >Inilah yang terjadi, yang menyebabkan PLN selalu rugi dan harga listrik >harus naik tiap 3 bulan sekali. >Dari milis tetangga. > >Regards, > >Desma > >____________________________________________________________________________ > >Larouche Society March 28/2001 >Looting Indonesia: The energy brokers 'warm-up' for California by Michael >Billington > >It is now widely acknowledged among sane individuals that the ongoing >looting of California (and other states) by a handful of energy brokers, >under the cover of 'deregulation', is having the effect, as if by design, of >collapsing an economy which was already weakened by the bursting of the >financial bubble. It is instructive to those who may doubt that such >corporate geniuses would consciously destroy an economy, for nothing more >than an apparent short-term gain, to examine the process of looting which >has taken place against Indonesia since the mid-1990s, by many of the same >entities now 'doing' California. >Although the specific mechanism used was different, the species >characteristic of the looting process was precisely the same. After the >near-breakdown of the world financial system in 1987 and 1989, a >hyperinflationary process was unleashed out of New York and London, based on >the creation of a huge derivatives-based financial bubble, in order to >preserve the power of the (actually bankrupt) global financial institutions. >One aspect of this bubble was the 'globalization' process, generating hot >money flows into developing nations, financing maquiladora-style cheap-labor >export industries, and creating local bubbles in the real estate and equity >markets in much of the Third World--and in Asia in particular. >Energy generation, like most infrastructure in the Third World, was woefully >inadequate in Asia, so the energy companies jumped in to meet the need--an >admirable task, under normal circumstances, but conditions were hardly >normal. Although the following profile of the Indonesia situation was >repeated in nearly every country in the region, the Indonesian case is >exemplary. > >Sweetheart Deals with Suharto >Altogether, 27 joint venture energy contracts were set up in the early to >mid 1990s in Indonesia. Each one included a foreign power producer--we'll >examine below projects with MidAmerican, Edison Mission, and Florida Power >and Light--in partnership with the Indonesian state electricity company, >Perusahaan Listrik Negara (PLN), and an Indonesian private firm, inevitably >run by one of President Suharto's children. All had the same general >character: A power plant would be built on the condition that PLN (i.e., the >government) would be bound to purchase a fixed amount of electricity each >year, regardless of whether or not the electricity was needed at the time, >and that the cost of the electricity would be determined in dollars, not in >the local currency, the rupiah. >These lucrative deals were set up through personal connections between the >energy producers (and their international banks) and the Suharto family and >friends, the same circle which was later denounced as 'corrupt' by the >so-called 'international community'. While the fantasy persisted that the >financial bubble would expand forever (a fantasy that persisted within the >United States up until the past year), the Indonesian energy deals proved to >be a bonanza for everyone involved. >However, when the bubble burst in 1997-98, brought on by the speculative >attack on the Asian currencies by the hedge funds, and the conditionalities >imposed by the International Monetary Fund (IMF), the energy deals were >exposed for what they were--a scam which left the government helpless before >the combined power of the multinational corporations, the international >banks, the IMF, the United Nations, and the U.S. State Department, all of >whom demanded that the corrupt contracts be honored in full, or Indonesia >would be subjected to credit termination, economic sanctions, seizure of >assets, and political destabilization by non-governmental organizations >(NGOs) and other 'private' operations controlled by the Wall Street and >London power elite. >With the sudden collapse of the economy, and the subsequent rapid decline in >energy needs, many of the newly built power plants were no longer needed. >The risk, however, had been entirely transferred to the Indonesian >government, through the corrupt conditions of the contracts. Indonesia was >required to pay for electricity for which it had no use. Beyond that, since >the electricity was priced in dollars, when the speculative raid drove the >value of the Indonesian rupiah to about one-forth its former value, the >government-owned PLN was forced to pay four times the actual value (in >Indonesian terms) for the electricity it didn't need! >The currency eventually settled at about one-third its former value. PLN >raised the price on the electricity it sold to Indonesian consumers >substantially, but it could not even begin to charge the price it was forced >to pay the foreign producers. In fact, when President Suharto allowed an >increase in the costs of certain fuels, it precipitated riots which >ultimately brought down his government, and similar instability would have >been certain in the case of any further drastic rate increases. The result, >then, was that PLN was faced with purchasing huge quantities of energy at >prices in the range of 5-8ct per kilowatt hour, while reselling only a >fraction of that amount, and at only about 2-3ct per kilowatt-hour (kWh). >This ridiculous, untenable situation could only be truly appreciated by a >California governor! >The Indonesian government approached the 27 different foreign producers with >a request that the contracts be renegotiated to account for the drastically >changed circumstances. In some of the cases where plants were not yet >completed (or not yet begun), the contracts were cancelled, with requests >for reasonable breach of contract settlements. The response was a barrage of >hypocritical demands that the sanctity of contracts must be upheld. The >extent to which pure thug tactics were used is demonstrated in the case >studies below. >Several leaders in the new Indonesian government pointed out the obvious >inconsistency: Why is it that the IMF and other foreign interests insist >that the 'cronyism and corruption' of the Suharto era must be ended, by >imposing 'transparency', and by bringing those guilty of corruption to >trial, but that the foreign partners who participated in the corruption (or, >more likely, instigated it) are not only let off the hook of criminal >responsibility, but their corrupt contracts must be respected to the letter? >In August 1999, then-PLN president Adhi Satriya said he would ask the courts >to 'annul contracts secured by the Independent Power Brokers through corrupt >practices, and to punish all those involved'. He accused former PLN >directors of signing contracts with 'marked-up prices', even before the >devaluations. One former PLN chief, Djiteng Marsudi, said that he had been >'forced' to sign such contracts under political pressure. In fact, as shown >below, failure by the Indonesian government to meet the terms of these >corrupt contracts led to legal proceedings in international courts which >simply disregarded the question of the general welfare of the Indonesian >people, and ignored rulings by Indonesian courts, while U.S. Ambassador >Robert Gelbard and the IMF issued explicit threats of sanctions if the pound >of flesh were not delivered As a result, the government is now losing >billions of dollars every year to the power brokers, while the country >descends further into poverty, social divisiveness, and rising levels of >violence. Is that California's future under the current deregulation >'free-market' policy? > >Case study #1: MidAmerican Energy Holdings >MidAmerican Energy Holdings Company (formerly CalEnergy), owned by Warren >Buffett, is both a leading international energy producer and a major player >in the deregulated energy markets in the United States and the United >Kingdom. MidAmerican contracted to build two geothermal power plants in >Java. One plant was completed and one was under construction at the time of >the 1997-98 collapse in Southeast Asia. >When Indonesia put a hold on the incomplete plant, and could not meet the >contracted purchases on the other, MidAmerican refused to renegotiate, but >took the matter to the United Nations Commission on International Trade Law >(Uncitral). This international body ruled in favor of MidAmerican, ordering >that Indonesia immediately pay $572 million to MidAmerican for breach of >contract. >PLN responded in May 1999, by filing suit in a Jakarta District Court to >annul the Uncitral ruling as having 'gravely prejudiced PLN's legal rights >by ignoring or misinterpreting the Indonesian laws', according to PLN >President Adhi Satriya. The contracts, he said, were 'clearly specified to >be subject to the sovereign laws of Indonesia'. MidAmerican returned to the >Uncitral, which simply asserted its jurisdiction over the dispute >'notwithstanding Indonesian court orders purporting to enjoin the >arbitration ... in violation of generally recognized principles of >international law'. >Since Indonesia had no means of paying the extortionists, MidAmerican turned >to its insurers, which included the U.S. government's insurance operation, >the Overseas Private Investment Corp. (OPIC), which paid the American firm >for its loss in the collapsed Indonesian market. Rather than leaving it at >that, the U.S. State Department, behind the thugish U.S. Ambassador to >Indonesia, Gelbard, went to work to collect the blood money. In July 2000, >Gelbard announced that he was 'running out of patience' with Indonesia's >tardy repayment to OPIC of the $290 million it had paid to MidAmerican. >'There is always the possibility of declaring expropriation [of Indonesian >assets].... If we were to do this', snarled the diplomat, 'it would result >in a dramatic deterioration of the rupiah and would hurt Indonesia very >much'. > >Case study #2: Edison Mission Energy >Edison Mission Energy (EME), the international arm of the same holding >company, Edison International, which owns Southern California Edison, >launched a $2.5 billion project in Indonesia in February 1994, called Paiton >Energy, in partnership with General Electric, Mitsui, and a local firm run >by an associate of General Suharto. The total energy production was >contracted to the state electricity company, PLN, with all costs indexed to >the Indonesian rupiah/U.S. dollar exchange rate established at the time the >agreement was executed. The 30-year agreement called for PLN to pay 8.4ct >per kWh for six years, declining slightly after that. >As with MidAmerican, the entire risk was transferred to the Indonesian >government. After the collapse in 1998, PLN president Adhi called on Paiton >to lower their prices, calling the original price a 'world-class mark-up'. >Adhi pointed out that the 'take-or-pay' clause, which held PLN to pay $995 >million per year for 'fixed costs', was enough to develop a new power plant >of 600 megawatts each year. After a year of fruitless discussions, PLN went >into court in Jakarta to nullify the contract as 'unlawful, unfair, and not >transparent', and called on the court to declare the contract 'void and not >enforceable'. >Paiton then followed the path of MidAmerican's successful use of >'extraterritoriality', going outside the Indonesian court system, to >international arbitration, 'to preserve the sanctity of its power-purchase >agreement and to protect the interest of its shareholders, lenders, and >other credit support providers'. Let the welfare of the Indonesian people be >damned. The Central Jakarta District Court appeared to be moving toward a >favorable ruling for PLN, when the new government of President Abdurrahman >Wahid, under intense pressure from the 'international community', decided to >drop the suit, agreeing to an out-of-court settlement. PLN President Adhi >and a top assistant resigned. > >Case study #3: Florida Power and Light >In 1994, Florida Power and Light (FPL), in partnership with Caithness Energy >(which has recently attached a lien on Southern California Edison for unpaid >bills from the debt-ridden utility), contracted with PLN and Indonesia's >state oil firm, Pertimina, to build a 400 mw geothermal plant in West Java. >As in all the sweetheart deals with the Suharto regime, all risk was shifted >to the government, including a clause which specified that Indonesia would >bear the entire burden if the government took any action detrimental to the >project. >Between 1994 and 1998, FPL and its other foreign partners spent $93 million >on site search, testing, and other preparatory measures, but had not begun >construction when the crisis hit, causing the government to cancel the >project, in January 1998. FPL took the case to the UN arbitration board, >which not only awarded FPL its entire invested capital (since, of course, >these 'free trade' deals bore zero risk), but awarded them an additional >penalty of $150 million, for 'lost profits'--i.e., profits they could have >extracted had the project gone through! >In February of this year, FPL took the case to the U.S. District Court in >the Southern District of Texas, with a petition to confirm the award and >enforce payment. Why Texas? Because Pertimina has property and assets in >Texas--the same assets Ambassador Gelbard had threatened to seize for >MidAmerican--which FPL plans to grab for itself if the Indonesians refuse to >wring the unearned profits out of the bare sustenance of the population. >Other Cases: Enron >There are other cases. Enron, the powerbroker now at the center of the >criminal looting process in the United States, signed an agreement in 1996 >to build a power plant in East Java, which was to begin construction in late >1997. When the contract was cancelled after the crisis, Enron walked away >with $15 million. And there are more. Indonesia, with half its population >suddenly thrust into poverty, with ethnic and regional conflicts tearing at >the very structure of the republic, has been forced to bear the entire >burden of the foreign 'shareholders' value'. >For the year 2000, PLN posted losses of $2.2 billion, adding drastically to >the nation's overall intolerable debt burden--and there is no indication >that the looting process will end in the foreseeable future. Wherever the >sovereign regulation of utilities are manipulated, eliminated, or ignored, >the powerbrokers have proven to follow the lure of fast money, rather than >the long-term need for the development of a nation's infrastructure. That >this process destroys the future market for such power industries >themselves, seems to be of no concern. America has watched passively as our >friends and neighbors have been financially and economically raped, often in >our name. Will we remain passive, now that the rapists have turned their >sights on California? > > > > > >[Non-text portions of this message have been removed]
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