A joint venture formulated between Indonesian entities Aneka Tambang (Antam) and Inalum, most commonly known as Borneo Alumina Indonesia, might discard its plan of constructing an $831.5 million alumina refinery located at Mempawah Regency in the West Kalimantan Province of Borneo Island. This decision was taken due to prevailing disagreements between the contractors, as was reported by the director of MIND ID.
MIND ID is Indonesia’s mining industry holding company that has been constituted with the help of institutions like PT Bukit Asam, PT ANTAM Tbk, PT Indonesia Asahan Aluminium (Inalum), PT Freeport Indonesia and PT Timah Tbk.
Danny Praditya, the director of MIND ID, has disclosed during a parliamentary hearing that if the affair is not dealt with by October, the contract would be terminated without giving the parties any more chance to continue.
As early as in March, the JV had identified the ever-lasting feud between its procurement, engineering and construction divisions. A state organisation, PT Pembangunan Perumahan and China Aluminium International Engineering (CHALIECO) were entrusted with the responsibility of building the alumina refinery. Yet, they have been fighting over work items and contract value for almost six months, which is very unprofessional.
Director at Borneo Alumina, Darwin Saleh, reported to the hearing: “Until now, there has been a 16-month delay, which we calculate would mean a potential revenue loss of $450 million.”
The contract for the project was attested during 2020, with construction scheduled for 2022, but persistent brawls between the two concerned companies have already delayed the project till 2024.
Until recently, the contractors were bold enough to ask for an extension of the contract to which Danny Praditya sternly said no. PT Pembangunan Perumahan and CHALIECO wanted a time expansion till 2025, but the MIND ID director is hell-bent on completing the construction at their last agreed timespan or not completing it at all.
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