Govt still waiting for Pertamina's graft probe

JAKARTA (JP): The Ministry of Mines and Energy said on Monday it was awaiting the results of the investigation by state oil and gas company Pertamina into contracts worth more than Rp 10 billion (US$1.2 million) entered into by the company.

The ministry's secretary-general, Djoko Darmono, said the ministry would send a letter to Pertamina in the near future calling on the company to submit the results of its investigation.

"We received a letter from Coordinating Minister of Developmental Supervision and Administrative Reforms (Hartarto) two weeks ago to ask about the results of the new investigations into cases of KKN (corruption, collusion and nepotism) at the ministry and state companies under the ministry's supervision," Djoko said.

"The results of Pertamina's investigation will become part of our report to Pak Hartarto," Djoko said.

Pertamina president Martiono Hadianto promised earlier this year to investigate all contracts worth more than Rp 10 billion entered into by the company in an effort to eliminate corruption, collusion and nepotism in the company.

He instructed his staff to check whether proper procedures were followed in awarding the contracts and if fees charged to Pertamina by contract holders were "reasonable".

"Proper procedures are not enough. All the contracts should also quote reasonable prices," Martiono said last February.

Martiono became president of Pertamina in January 1999.

Pertamina announced last year it had discovered 159 contracts entered into by the company with former president Soeharto's children and associates.

There were indications Soeharto's children and associates received the contracts through questionable business practices, including corruption, collusion and nepotism, the company said.

Djoko said Pertamina had "taken action on" 157 of the contracts and was still processing the remaining two contracts.

The actions taken by Pertamina included annulling or renegotiating the contracts.

Pertamina claimed it would save $64.7 million plus another Rp 212 billion per year as a result of the annulments and renegotiations. (jsk)