Balongan oil refinery project allegedly marked by US$200 million<\/p>\n
Tiarma Siboro
\nThe Jakarta Post
\nJakarta<\/p>\n
A joint team investigating suspected corruption in the Balongan
\noil refinery project in Indramayu, West Java, said on Thursday
\nthat the value of the project had been marked up, thereby causing
\nstate losses amounting to US$185.58 million and Rp 14.5 billion.<\/p>\n
I Putu Kusa, deputy attorney general for economic
\nintelligence, said that Tabrani Ismail, former processing
\ndirector of state oil company Pertamina, the owner of the
\nproject, would be charged as a suspect due to his role in marking
\nup the value of the project.<\/p>\n
\"Tabrani will be charged as a suspect as he was the one in
\ncharge of estimating the project's value at $1.8 billion,\" Putu
\nsaid. The real cost of the project was believed to be only about
\n$1.6 billion.<\/p>\n
\"His estimate caused the state losses amounting to $185.58
\nmillion if we look at the difference between the Pertamina
\nestimate and the value of the project as stated in the contract.\"<\/p>\n
\"Tabrani also failed to account for Rp 14.5 billion and
\nUS$752.9 million in funds classified as other costs,\" Putu told a
\npress conference at the Attorney General's Office.<\/p>\n
Besides Putu, the investigating team consisted of
\nrepresentatives from Pertamina and the Development Finance
\nComptroller (BPKP).<\/p>\n
Putu underlined that his team would also investigate other
\nstate officials -- former coordinating minister for the economy,
\nfinance and industry\/development supervision Radius Prawiro,
\nformer minister of mines and energy Ginanjar Kartasasmita, former
\nspecialist at the office of the state minister for research and
\ntechnology Kho Khian Kho and former Pertamina president Faisal
\nAbda'oe -- in connection with their alleged involvement in the
\ncase.<\/p>\n
Also attending the press conference were the team's
\ncoordinator Brig. Gen. (ret) Sartono of Pertamina, Nazrullah
\nUzamah of the BPKP, and spokesman for the Attorney General's
\nOffice Muljohardjo.<\/p>\n
The Balongan refinery was built between 1990 and 1995 by a
\nconsortium of contractors led by Foster Wheeler of Britain. It
\nhas a refining capacity of 125,000 barrels per day.<\/p>\n
According to Putu, the project was first discussed by former
\npresident Soeharto and former British prime minister Margaret
\nThatcher during her visit to Indonesia in 1985.<\/p>\n
\"Thatcher promised at the time that the British government
\nwould help finance the project by providing a loan worth $60
\nmillion and a $140 million grant. But she insisted that British
\nPetroleum should be the sole buyer of the oil and Foster Wheeler
\nbe the leader of the consortium,\" Putu said.<\/p>\n
No explanation was given as to why the British government
\ncanceled its financial assistance. But as the project had already
\nbeen planned, former minister of mines and energy Soebroto
\ndecided to continue with it on condition that Foster Wheeler
\nwould finance it with Indonesia repaying the cost from the sale
\nof the refinery's products, Putu continued.<\/p>\n
According to Putu, Pertamina insisted during its talks with
\nFoster Wheeler that the project cost should not exceed $1.7
\nbillion, but later softened its stance, allegedly based on Kho's
\nestimate that its cost would reach $1.9 billion.<\/p>\n
\"Kho reportedly said that Pertamina was incapable of handling
\nthe project by itself,\" Putu said.<\/p>\n
Putu further said that instead of heeding Pertamina's
\nsuggestion, both Ginandjar and Radius decided to approve the
\nproject construction contract worth $1.8 billion.<\/p>\n
\"Ginandjar told the team earlier that his decision was taken
\ndue to a request by Soeharto who objected to the halting of the
\nproject due to financial problems,\" Putu said.<\/p>\n
Sigit Hardjojudanto, Soeharto's eldest son, is also allegedly
\nimplicated in the scandal.<\/p>\n
Sigit, however, denied any involvement, saying that he took no
\nactive part during the project's negotiation process or when the
\ngovernment approved the construction of the refinery.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/balongan-oil-refinery-project-allegedly-marked-by-us200-million-1447893297",
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