Councillors allege corruption in plane purchases

Rusman, The Jakarta Post, Samarinda, East Kalimantan

The East Kalimantan Legislative Council disclosed on Thursday an alleged markup in the procurement of five Australian-made airplanes worth Rp 27.5 billion (US$31.2 million).

The disclosure was made after councillors from Commission C held a hearing with Melati Bakti Satya (MBS), a company run by the local administration that was appointed to deal with the purchase of the planes.

Rikmo, a member of Commission C, said that allegations of corruption surfaced after the councillors learned that the local administration failed to present a financial report detailing the fund allocation, including the profit received by local partners of the Australian-based company.

The company had established a partnership here with PT Airvan Dirgantara Indonesia (PT ADI).

"I don't know who has committed fraud. It could be PT ADI, the contractor or the local administration, or even the Australian company.

"We are now investigating the case to find out who has benefited from the transaction," Rikmo said after the Thursday hearing.

Also present during the hearing was Irianto Lambrie, chairman of MBS supervisory board.

Based on an order recently issued by East Kalimantan Governor Suwarna AF, his administration transferred Rp 27.5 billion to MBS to procure the five GA8 Airvan planes.

It means that the planes should have cost up to Rp 5.3 billion each, while the official price as cited on the Australian company's website is only Rp 3.5 billion, Rikmo said.

"The case could tarnish the image of both countries. This will reveal the good or bad image of the Indonesian administration," he added.

Meanwhile, Irianto Lambrie denied that the local administration had not involved him in the procurement process.

"As far as I know, there's nothing wrong with the prices, because the commercial contract showed that one airplane was bought for Rp 5.3 billion," he said.

However, Irianto promised to investigate the possibility of a mark up in the price.

"We are now expecting the results of the investigation from a team of public accountants to find out whether or not such an illegal practice has taken place. Just wait. I cannot give the details now," he said.

The five planes will be used to assist officials at the gubernatorial office in handling their tasks, and to provide a transportation facility for local people living in remote areas, officials said.