BIL set to abandon AsiaPower

WELLINGTON - Brierley Investments chairman Sir Selwyn Cushing says the company is prepared to walk away from its power station investment in Indonesia worth hundreds of millions of dollars.

"We don't wish to do anything that isn't respectable, but ... if difficulties and political upheavals cause further problems, BIL does not have to go further. Its obligations are complete," he said.

Brierley has already largely written off its investment in the Wayang Windu geothermal power station in West Java.

Originally conceived of as a $US1.2 billion ($2.29 billion) project to build a 330 megawatt plant, the project was hit by the Asian crisis in 1997. Stage I, a 110 MW plant, was completed last month and transmission lines to connect it to Indonesia's grid are due to be finished in January.

However, AsiaPower has contracts to sell its power at a set rate in US dollars based on international prices and it is doubtful Government power retailers would be able to buy the power at those prices.

Sir Selwyn said money should start to flow from the project in March or April but he expressed doubts.

He said that while AsiaPower was 95 per cent owned, Brierley did not provide any guarantees. "There are such things as limits of liabilities." - NZPA