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)