Ginandjar asserts innocence in Balongan scandal

Ginandjar asserts innocence in Balongan scandal

JAKARTA (JP): A lawyer claimed on Tuesday that outgoing
Coordinating Minister of Economy, Finance and Industry Ginandjar
Kartasasmita was not involved in the alleged corruption at the
Balongan refinery in West Java.

Lawyer Muchyar Yara of Muchyar Yara & Associates, who
represented Ginandjar, said his client was not handling the
project when it was prepared from 1989 to 1990, despite the fact
he then served as the mines and energy minister and the chief
commissioner of state oil and gas company Pertamina.

Under Presidential Decree No. 1/1988, the project was handled
by the then coordinating minister of economy, finance and
industry and development supervision, Radius Prawiro, Muchyar
said.

"Our client was by no means involved in the whole process of
the project, from the beginning to making decisions on it ...
because under the presidential decree, it was beyond his
authority," Muchyar said in a letter sent on Monday to the
anticorruption watchdog, Indonesian Corruption Watch (ICW).

A copy of the letter was made available to The Jakarta Post on
Tuesday.

Muchyar said under the decree, all projects worth more than Rp
3 billion (about US$350,000) were to be approved by the
coordinating minister of economy, finance and industry and
development supervision.

The Balongan refinery, located in Indramayu, was built from
1990 to 1995 by British firm Foster Wheeler at the cost of $1.813
billion. It has the processing capacity of 125,000 barrels of oil
per day.

ICW sent a letter on Thursday to President BJ Habibie
questioning him about a follow-up to the investigation into the
alleged graft at the refinery.

ICW's chairman Teten Masduki said the Attorney General's
Office found evidence that the cost of the project was marked up
by $113 million.

Former attorney general Muhammad Ghalib also reported the
people responsible for the alleged corruption to the President,
but no legal action was taken against the suspects, ICW said.

Ghalib said in his letter to the President dated May 21, 1999,
that there were indications former Pertamina president Faisal
Abda'oe and former Pertamina processing director Tabrani Ismail
were implicated in the alleged graft.

He also said former mines and energy ministers Soebroto and
Ginandjar, as well as former Pertamina president AR Ramly, should
also be questioned over their knowledge or possible involvement
in the case.

Ghalib said the idea for the project originated from former
British prime minister Margaret Thatcher during her 1998 visit to
Jakarta.

Thatcher offered a $60 million grant from the British
government for the project.

Then Pertamina president AR Ramly, as well as then minister of
mines and energy Soebroto, approved the project. They appointed
Foster Wheeler as the contractor, British Petroleum as the
offtaker of the refinery products and Japan's Mitsui as the
financier.

Ghalib said during the price negotiation from 1989 to 1991,
Pertamina's team of negotiators, led by Tabrani, accepted a
marked-up price set by Foster Wheeler under pressure from former
president Soeharto's son, Sigit Hardjodjudanto, and his relatives
Erry Oudang and Bing Cintamani.

Ghalib said Sigit and his relatives, who always accompanied
Foster Wheeler during the negotiation, told Tabrani the price set
by the company was approved by Soeharto.

Local media said Sigit and his relatives got a commission from
Foster Wheeler for the service.

Faisal awarded the contract to Foster Wheeler in April 1990.

Ginandjar, who took over from Soebroto in April 1988,
confirmed that the idea for the project originated from Thatcher
and the project was approved by Soebroto in March 1988.

Muchyar said Ginandjar sent a letter to Faisal in Aug. 1989
ordering him to directly report the result of the price
negotiation to coordinating minister of economy, finance and
industry and development supervision in line with the existing
regulation. (jsk)