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)