Habibie letter confuses Natuna project parties
JAKARTA (JP): A letter sent by President BJ Habibie's close aide has drawn conflicting interpretations over the President's policy on the contract awarded to PT McDermott Indonesia for the construction of the natural gas pipeline connecting the area west of Natuna island and Singapore.
Legislators said the letter sent by the secretary for development operation control (Sesdalopbang), Sintong Pandjaitan, indicated that Habibie supported the idea of retendering the project to end the controversy revolving around the selection of McDermott.
"To be honest, the letter is confusing. But the letter appears to indicate Habibie wants the appointment of McDermott to be canceled," legislator Hari Salman Farizi Sohar told The Jakarta Post.
But state oil and gas company Pertamina said the letter indicated Habibie supports Pertamina's decision to approve McDermott for the project.
"For us, the letter clearly shows that the President supports the selection of McDermott," Pertamina foreign contractor management body (BPPKA) spokesman Sidick Nitikusuma told The Post.
Sesdalopbang, which is not part of the Cabinet, serves as a close aide to the President.
Pandjaitan sent the letter on Aug. 30 to Minister of Justice/State Secretary Muladi, Minister of Mines and Energy Kuntoro Mangkusubroto and Minister of Finance Bambang Subianto, as a reply for the letter sent by Pertamina president Martiono Hadianto on Aug. 20.
"We hereby inform the instructions of the President ... that the West Natuna gas project should be continued on schedule as determined in an open and transparent bidding so that the winner of the bidding is free from the elements of corruption, collusion and nepotism (KKN)," Pandjaitan said in the letter.
Copies of the letter were sent to Habibie and Martiono.
McDermott, a subsidiary of American construction firm J Ray McDermott SA, won the project with the lowest bid of US$335 million.
The 560-kilometer underwater pipeline will be used to transport natural gas to Singapore from the gas fields developed by three of Pertamina's contractors: Premier Oil of Britain, Gulf Resources of Canada and Conoco Inc. of the United States.
House of Representatives Commission V for mines and energy recently recommended the government cancel McDermott's contract after finding irregularities in the bidding process for the project.
The commission charged McDermott with benefiting from insider information to win the project, but McDermott strongly denied the charge.
The commission recommended the government transfer the contract from McDermott to one of its competitors: Italian firm Saipem, French firm ETPM or Japanese firm Nippon Steel.
The House board of leaders approved the recommendation and sent it to Kuntoro on Aug. 31. (jsk)