Govt reviews deals with Soeharto's kin

Govt reviews deals with Soeharto's kin

JAKARTA (JP): The government said on Tuesday that it is
reviewing and severing many business contracts signed by its
agencies and enterprises with children of former president
Soeharto and his crony Muhammad (Bob) Hasan.

However the government has resisted public pressure to take
over huge funds managed by five charity foundations chaired by
Soeharto, stressing that the money belonged to the foundations
and not to the former president.

The Coordinating Minister for Development Supervision and
State Administrative Reform, Hartarto, announced the latest
measures as part of a government campaign to eliminate
corruption, collusion and nepotism in the bureaucracy.

In some instances, the measures would lead to big savings for
the government, Hartarto said.

Many of these deals were obtained largely as a result of
political connections, and not through competitive bidding.

All contracts held by Soeharto's eldest daughter Siti
Hardijanti Rukmana pertaining to toll road construction and
operations across the country would be reviewed.

Soeharto's sons Bambang Trihatmodjo and Hutomo (Tommy) Mandala
Putra have been cut out of many money spinning deals at the state
oil company Pertamina, including the shipment of liquefied
natural gas and their intermediary role in oil trading.

Bob Hasan also had his hands in many Pertamina deals.

Hartarto said the move would save Pertamina $82.76 million a
year.

The government has also rescinded and reviewed various
contracts for procurement and marketing at Garuda Indonesia
airlines and at Krakatau Steel.

Perum Kereta Api, the state railway company, is reviewing four
contracts that were deemed disadvantageous to the government.

They are the coal transportation deal in South Sumatra with PT
Intra Sarana Manunggal (owned by Bambang and Mamiek Soeharto),
the Wonokromo-Tanjung Perak toll road in Central Java with PT Tri
Daya Esta (Bambang), and the construction of the Triple Decker
subway system in Jakarta and the construction of an integrated
railway/bus terminal in Manggarai (both Siti Hardiyanti Rukmana).

Reforestation fund

The government is also tightening the use of the reforestation
fund administered by the Ministry of Forestry and Plantations.

Funds loaned to finance last year's Southeast Asian Games and
small enterprise credit schemes will be reclaimed.

Stocks in PT Dua Satu Tiga Puluh -- a company set up to raise
funds for the development of Indonesia's national jet project --
will be sold off if the government can find a buyer. The stocks
were purchased using money taken from the reforestation fund.

The government is canceling a loan to Bob Hasan's PT Kiani
Kertas paper manufacturing company which was originally going to
come out of the reforestation fund.

Hartarto said the government was reviewing all forest
concessions and would be very selective in issuing new
concessions and extending old ones.

The Ministry of Forestry and Plantations has terminated its
contract with Tommy's PT Gatari transport company and demanded
that the company return all the ministry's helicopters in good
condition. The ministry will now employ Air Force personnel to
fly them.

The government is also reviewing the ownership of land in
Greater Jakarta to make sure that no individual or developer has
excessive control over certain areas.

Hartarto said the government campaign would continue and
progress reports would be announced every three months.

Attorney General Andi Muhammad Ghalib, who accompanied
Hartarto to the briefing in the Bina Graha presidential office,
said the announcement was part of a "crisis management" package.

"People are anxious to see results. Trust us, the government
will be consistent in eliminating corruption," Ghalib said.

On Soeharto's foundations, Hartarto said the government was
still conducting both legal and financial audits.

A preliminary study found indications of misuse of the funds
by Bob Hasan, who is an executive at one of the foundations,
Ghalib said.

The five foundations -- Supersemar, Amal Bhakti Muslim
Pancasila, Dharmais, Dakab and Dana Sejahtera Mandiri -- control
approximately Rp 3.7 trillion in funds. (prb/emb)