Government to retender 320-km pipeline project
Government to retender 320-km pipeline project
DENPASAR, Bali (JP): The government has annulled the contract
awarded to PT Trihasra Binanusa Tunggal, a company owned by
former president Soeharto's children, for construction of a 320-
kilometer fuel pipeline in Java.
State oil and gas company Pertamina's director for domestic
distribution and marketing, Hadi Nugroho, said here on Monday
that Coordinating Minister for Development Supervision and Sate
Administrative Reforms Hartarto Hadisoemarto had recently
canceled the contract at the recommendation of the State
Comptroller Agency (BKPP).
The government considered the contract invalid because
Trihasra, which is controlled by Soeharto's daughter Siti "Tutut"
Hardiyanti Rukmana and her brother Bambang Trihatmodjo, was
selected without a competitive bidding process, Hadi said.
"The megaproject will be put into open bidding, but the date
has not yet been determined given the monetary crisis," Hadi said
on the sidelines of the ceremony to deliver the International
Standard Organization (ISO) 9002 certificate to Pertamina's
marketing and distribution unit at Ngurah Rai Airport in
Denpasar.
The cross-Java fuel pipeline project is aimed at establishing
integrated fuel pipelines linking Pertamina's refineries in Java
to all major cities on the island.
According to Pertamina data, Trihasra Binanusa Tunggal is 35
percent owned by PT Trihasra Utama Tunggal, a company controlled
by Tutut; 35 percent by Bambang's PT Bimantara Citra, and the
remaining 30 percent by PT Tranaco.
In 1992, the company signed a build-and-transfer contract with
Pertamina for the development of fuel pipelines linking all
refineries cross Java and major cities on the island to secure
fuel supplies.
Pertamina has refineries in Balongan, West Java, and Cepu and
Cilacap in Central Java.
Pertamina built several fuel pipelines in the early 1990s,
including a 223-kilometer pipeline linking Cilacap and Rewulu
near Yogyakarta and 180-kilometer pipelines between Cilacap and
Bandung.
Trihasra first developed a 221-kilometer fuel pipeline from
Balongan to Jakarta worth US$80 million. The construction of the
pipeline was completed in 1994.
The company planned to expand the pipeline network from Rewulu
in Yogyakarta to Semarang, a distance of about 140 kilometers,
Balongan to Malangbong near Tasikmalaya in West Java (120
kilometers) and from Sukabumi to Padalarang (60 kilometers).
Hadi said the fuel pipeline expansion project was among dozens
of megaprojects postponed by the government in September 1997 as
part of its retrenchment efforts to cope with the crisis.
He said earlier the government hoped the expansion project
would be completed by 2003, but the time frame had been extended
due to the depressed growth in fuel demand on the island amid the
crisis.
Pertamina recently announced it ascertained 159 contracts
entered into with Soeharto's family and cronies suggesting
collusion, corruption and nepotism.
The state company was long associated with Seoharto's family
and intimate circle who handsomely profited from the country's
oil and gas operations during Soeharto's 32-year rule.
The government has annulled or retendered dozens of projects
awarded to Soeharto intimates. (jsk)