Building to be sold

According to media reports, the Timor Building, which is owned by PT Timor Putra Nasional (PT TPN) and located on Jl. Medan Merdeka Timur, will be sold to a state-owned enterprise by its owner Hutomo Mandala Putra (Tommy Soeharto) because Presidential Decree No. 25/1995 prohibits any private buildings from being constructed in the area.

Tommy Soeharto has met Jakarta Governor Sutiyoso to discuss this matter and the governor has promised to help Tommy find a buyer. The governor said he will talk this over with Tanri Abeng, the State Minister of the Empowerment of State Enterprises.

In fact, the government does not need not to buy the building. It could just confiscate it because the company has huge outstanding debts to the state, including huge outstanding debts on tax obligations.

PT TPN was granted an exemption from import duties and value added taxes on luxury goods for the import of 40,000 sedan automobiles from South Korea as a result of Presidential Decree No. 2/1996. However, this decree is legally defective because it contradicts existing tax laws and Article 23 of the 1945 Constitution. President Soeharto did not have the authority to issue this presidential decree because it is nepotistic, it results in a loss to the state, it benefits another party and it is against the law. In view of this, the decree meets the criteria on corruption as set forth in the anti-corruption law (Law No. 3/1971). It is estimated that this presidential decree has cost the state Rp 800 billion -- Rp 20 million on each of the 40,000 automobiles brought into the country under the special privilege. This money must be returned by PT TPN.

The company also owes money to a consortium of banks, including some state banks. The debts, which are guaranteed by Bank Indonesia, amount to approximately US$ 100 million and must be repaid.

Therefore the government will only be wasting money if it buys the Timor Building. Given the state's unhealthy financial condition, it would be better if the government confiscated the building and then use it to ensure that PT TPN repays its debts to the state.

I hope the Attorney General and the Minister of Finance will take immediate action to this end. As for the State Minister of the Empowerment of State Enterprise, he should avoid purchasing the Timor Building, because if he does not he will be tainted by his association with a corrupt, collusive and nepotistic deal. Stop granting privileges to the Soehartos. They have incurred huge losses for the state and the Indonesian people. Save the state's wealth and assets.

SUHARSONO HADIKUSUMO

Jakarta