Govt swears to root out KKN in power contracts
Govt swears to root out KKN in power contracts
JAKARTA (JP): Minister of Mines and Energy Kuntoro
Mangkusubroto has pledged that the government will stamp out all
traces of corruption, collusion and nepotism in the awarding of
power projects to independent power companies.
"No question about that. We shall eliminate elements of KKN in
the power contracts," Kuntoro said on Tuesday after delivering a
speech at a business luncheon organized by the Indonesian
Business Circle.
KKN is the Indonesian abbreviation for corruption, collusion
and nepotism.
Kuntoro said a cross-ministerial team -- formed by President
B.J. Habibie on Sept. 11 to restructure state-owned electricity
company PT PLN and renegotiate its power purchase agreements with
independent power producers -- had to yet to devise concrete
steps for the action.
Even before the crisis hit the country last year, the power
purchase agreements had become a major source of public
controversy because they were said to have benefited only the
independent power companies.
With the sharp plunge of the rupiah against the U.S. dollar,
the deals -- which required PLN to buy the power from the
independent producers in U.S. dollars -- worsened PLN's position
because the price of the power was far higher than its retail
price in rupiah terms.
Asked if the independent power producers would be ordered to
sever ties with local partners implicated in corruption,
collusion and nepotism practices, Kuntoro responded: "Maybe."
PLN has signed power purchase agreements with 26 independent
power producers, most of which are joint consortiums of
international power companies and former president Soeharto's
family -- including Siti Hardiyanti Rukmana, Bambang Trihatmodjo,
Hutomo "Tommy" Mandala Putra, Siti Hediati Prabowo, Sigit
Harjojudanto and Sudwikatmono -- and close associates like Hashim
Djojohadikusumo and Mohamad "Bob" Hasan. Many partners also have
links to military-affiliated foundations like Kartika Eka Paksi
and Himpurna.
Analysts charge the Who's Who of Soeharto associates leaves
the unsavory impression that the projects are among the country's
most blatant legacies of nepotism and collusion from the Soeharto
era.
According to PLN data, most of the contracts were awarded
without competitive bidding.
PLN's former president Djiteng Marsudi said earlier this year
that he was "coerced" into signing the contracts.
Industry sources allege most of the local partners of the
power producers received generous shares of between 10 percent to
20 percent from their foreign partners in return for facilitating
the acquirement of contracts.
The allegation is difficult to prove.
The government has unilaterally annulled a number of contracts
awarded by state companies to Soeharto's family and cronies.
(jsk)