Ginandjar's role in alleged graft to be probed: Marzuki

Ginandjar's role in alleged graft to be probed: Marzuki

JAKARTA (JP): Attorney General Marzuki Darusman said on
Wednesday his office would continue investigations into alleged
corruption in the renewal of PT Freeport Indonesia's mining
contract and the awarding of a power purchase contract to PT
Paiton Energy.

Marzuki, in a hearing with the House of Representatives
Commission VIII which oversees, among other things, mines and
energy, said that his office would make further investigations to
determine the involvement of former minister Ginandjar
Kartasasmita and other parties in the alleged corruption.

"More data gathering is needed to ascertain the extent to
which GK and other parties were involved," Marzuki said,
referring to Ginandjar by his initials.

The hearing was held after the commission's hearing with
Ginandjar in the morning.

Freeport, which is majority owned by American mining giant
Freeport McMoRan Copper & Gold, operates a huge copper and gold
mine in the Grasberg area in Irian Jaya. It received its mining
contract in 1967 and renewed it in Dec. 30, 1991.

Paiton Energy, which is owned by, among others, American
energy firm General Electric and Mission Energy, operates a giant
coal-fired power plant in Probolinggo, East Java. It is the first
independent power producer to sign a power purchase contract with
state electricity company PT PLN.

Controversy over both contracts erupted after the resignation
of former president Soeharto in the middle of 1998.

Legislators and analysts, suspecting corruption practices in
the awarding of both contracts, called for an investigation into
all parties, including governmental officials, involved in the
awarding of the contracts.

Ginandjar served as minister of mines and energy when Freeport
renewed its contract and Paiton Energy was in the process of
securing a deal with PLN.

The administration of president B.J Habibie, who replaced
Soeharto, started probing the cases but the investigation has
thus far brought no results.

Marzuki told legislators that his office had discovered
indications of corruption in the deal between Freeport and ICICI
-- a subsidiary of the Bakrie Brothers Group -- allowing the
latter to acquire a stake in Freeport.

Marzuki said the deal was suspicious because it was made
before the government renewed Freeport's contract. Under the new
contract, Freeport has to divest some of its shares to Indonesian
companies after the renewal of the contract.

Marzuki also suspected that the Bakrie unit had failed to pay
some taxes to the government.

Regarding Paiton's case, Marzuki said his office had found
indications of corruption in the awarding process of the power
purchase contract to Paiton Energy.

Marzuki also said his office would also question several
former governmental officials, including Ginandjar, over alleged
corruption in the development of the Balongan refinery in West
Java, owned by Pertamina.

Ginandjar maintained his innocence during the hearing with the
commission.

He said the deal between ICICI and Freeport was by no means in
contravention with the new contract of Freeport.

Although ICICI clinched a deal with Freeport before the
government renewed Freeport's contract, Ginandjar said, the deal
only came into force after ICICI, which was later renamed PT
Indocopper Investama Corporation, fulfilled its obligation to
Freeport on Jan. 8, 2000, after Freeport's contract was renewed.

Concerning Paiton's case, Ginandjar maintained that Paiton
Energy obtained its contract through an objective selection by an
Indonesian team supported by some international consultants.
(jsk/bby)