KPPU sees fault in tanker sale<\/p>\n
Tony Hotland, The Jakarta Post, Jakarta<\/p>\n
The Business Competition Supervisory Commission (KPPU) said on
\nFriday it had discovered \"strong indications\" that Law No. 5\/1999
\non monopolies and unfair competition was violated in the sale of
\ntwo oil tankers by state oil and gas company PT Pertamina.<\/p>\n
If the indications were true, the sale could be annulled and
\nany party found guilty in the tender process could be either
\nfined a maximum Rp 25 billion (US$2.69 million) or an unlimited
\ncharge for damages.<\/p>\n
\"After a 30-day preliminary investigation and hearing with the
\nparties concerned, we have come to a conclusion that there are
\nindeed strong indications of unfair competition in determining
\nthe winner of the Pertamina tender for its two Very Large Crude
\nCarriers (VLCCs),\" said KPPU member Sutrisno Iwantono.<\/p>\n
Sutrisno said the KPPU had held hearings with newly installed
\nPertamina president Widya Purnama and former president Ariffi
\nNawawi, as well as State Minister of State Enterprises Laksamana
\nSukardi in his capacity as Pertamina chief commissioner.<\/p>\n
\"We've also been corresponding with (India-based) Indonian
\nEssar Shipping, one of the participants in the tender, and of
\ncourse, (Bermuda-based) Frontline Ltd. as the winner,\" he said.<\/p>\n
However, the KPPU refused to elaborate on the indication of
\nviolations it found in the tender process, saying only that the
\ntender may have violated Articles 16, 19(d) and 22 of the
\nAntimonopoly Law.<\/p>\n
Article 16 prohibits business players from making agreements
\nwith foreign parties that may lead to a monopoly or unfair
\ncompetition.<\/p>\n
Article 19(d) prohibits business players from discriminating
\nagainst other players, while Article 22 prohibits conspiring with
\nparties in determining the winner of a tender.<\/p>\n
Pertamina sold the two VLCCs in June to Norway's Frontline
\nShipping Ltd. for $184 million, despite protests by Pertamina's
\nlabor union and a recommendation from the House of
\nRepresentatives that the company hold on to the tankers for long-
\nterm benefits.<\/p>\n
Activists and the labor union have alleged that the tanker
\ntender was marred by collusion. They also pointed to a conflict
\nof interest in the appointment of consultancy firm Goldman Sachs
\nas financial adviser to the tender, as the firm owned a minority
\nshare in Frontline.<\/p>\n
Pertamina, which claimed the tanker sale was aimed at easing
\nthe company's cash flow problem, brushed aside the allegations,
\nsaying the tender was transparent. It also insisted that
\nFrontline won the tender fairly because other bidders could not
\nprovide a 20 percent down payment and a $5 million bid bond for
\neach of the vessels.<\/p>\n
Pertamina delivered one tanker to Frontline last month, and is
\nexpected to deliver the second one this month.<\/p>\n
Elsewhere, Sutrisno said the KPPU had sent letters to the
\nPertamina management, Laksamana and Minister of Finance Boediono
\nto take into account the legal process being undertaken by the
\ncommission before delivering the second tanker to Frontline.<\/p>\n
\"However, we didn't specify in the letters whether we demanded
\nthat they postpone delivery. I'm sure their lawyers know what
\nthey must do regarding this legal process. Just remember that
\nwe've warned them about this,\" he said.<\/p>\n
Sutrisno said the KPPU would investigate further upon an
\nexpectation it would uncover more details from many parties,
\nincluding experts.<\/p>\n
\"The process will take another 90 days maximum, then we'll
\ndeliver a verdict on the case,\" he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/kppu-sees-fault-in-tanker-sale-1447893297",
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