Energy ministry categorically denies KBC graft accusations

Energy ministry categorically denies KBC graft accusations

The Jakarta Post, Jakarta

The Ministry of Energy and Mineral Resources denied on Friday
accusations of graft involving Minister Purnomo Yusgiantoro.

The ministry was responding to a report published in this
daily on Thursday regarding demands raised by a number of
Indonesian professional groups that the authorities investigate
the minister in connection with the Karaha Bodas geothermal power
project.

Among the groups, the Indonesian Advocacy Reform Institute
(LARI) alleges that Purnomo was among those who received a share
of a US$10 million "commitment fee" paid by the Karaha Bodas
Company (KBC), the main investor in the aborted geothermal power
plant, to parties involved in the deal.

At the time, Purnomo headed an expert group at the ministry
known as the Geothermal Implementation Team.

"Allegations that Purnomo Yusgiantoro received US$10 million
are not true, and evidence is needed to support such claims,"
ministry spokesman Sutisna Prawira said in a letter sent to The
Jakarta Post.

He said that in 1990 Purnomo was a member of a team hired by
consultancy firm PT Persada Adhi Cipta, for which he was paid a
honorarium. This firm was then commissioned by PT Sumarah
Dayasakti, which owns a 10 percent stake in KBC, to do a
feasibility study on geothermal development, Sutisna said.

In 1994 Purnomo was appointed head of the Geothermal
Implementation Team at the ministry based on a ministerial
decree. Sutisna said the team was tasked with producing written
reports on geothermal energy development programs for the
minister and a steering committee comprising echelon one
officials.

"The implementation team was not tasked with conducting
negotiations," Sutisna wrote.

Purnomo has also denied the allegations.

The government has been engaged in a protracted legal battle
since 1998 with KBC, which accuses the government of breach of
contract by stopping the power project that year. In 1997 at the
beginning of the economic crisis, the government complied with a
recommendation from the International Monetary Fund to postpone
the construction of a number of infrastructure projects,
including the KBC power project.