ICW links Soeharto to city water deal
JAKARTA (JP): The Indonesian Corruption Watch (ICW) urged the government on Thursday to investigate former president Soeharto for alleged involvement in a Jakarta tap water deal which reportedly caused the state Rp 4.98 trillion (US$554 million) in losses.
Terming the deal illegal, ICW coordinator Teten Masduki told a news conference that both Soeharto and former public works minister Radinal Mochtar were responsible for agreements between city-owned tap water company PDAM Jaya and two foreign partners, Pam Lyonnaise Jaya (Palyja) and Thames Pam Jaya (TPJ).
He said Radinal should also be investigated.
"We call the deal a kind of takeover, not a privatization. It violates the law," Teten said at the conference, which was also attended by at least 50 PDAM Jaya employees.
Soeharto and Radinal, he said, were involved in the appointment of two private firms, PT Garuda Dipta Semesta, partly owned by businessman Anthony Salim, and PT Kekar Thames Airindo, partly owned by Soeharto's eldest son Sigit Harjojudanto, which were later changed to Palyja and TPJ after Soeharto's sudden resignation in May.
He said ICW's investigation determined Anthony had resigned from Palyja, but Sigit still owned 5 percent of TPJ's shares.
"Although the two firms have changed their names, they still operate under the old agreements. As there is no new agreement, it's illegal."
According to Teten, the appointment of the two firms violated the law on foreign investment since it was not based on a public tender.
It also violated the 1945 Constitution, especially Article 33 which stated that land, water and other natural resources should be managed by the state, he said.
Teten said ICW calculated the Rp 4.98 trillion losses, including a loan of Rp 2.4 trillion from the World Bank, lost city revenues of Rp 5 billion and a government subsidy of Rp 910 billion.
"We will report our findings to the National Police and the Attorney General's Office for investigation," he said.
He said findings would also be sent to the Ministry of Home Affairs and Governor Sutiyoso.
Dressed in their blue uniforms, the employees unfurled posters demanding the revocation of the water agreements.
"The water firm must be returned to PDAM Jaya," Murdiyanto, chairman of PDAM Jaya worker union, said.
He alleged the two foreign firms had invested nothing and only utilized PDAM Jaya's facilities for their own benefit.
Murdiyanto said the foreign firms did not care about employees welfare because PDAM employees were paid much less than their own employees.
Contacted by The Jakarta Post on Thursday, executives of the two firms countered the allegations were baseless.
Bernard Lafronge of Palyja and Nani Sariati of TPJ questioned how ICW calculated the state losses.
"It's not true. Where did it get the amount? We have never borrowed from the World Bank," said Nani, TPJ's sales and marketing manager.
Lafronge said his firm secured loans from European private banks with its corporate guarantee. "Our firm has an international reputation, so we could get the loan."
He also denied allegations about the subsidy and said the appointment of the firms was aimed to ease the subsidy.
Nani denied Sigit retained a share in the firm. "Not a single share of our firm is owned by Sigit. We have all the legal documents."
She said the firm's legal team checked to ensure the water deal signed in February last year did not violate the law. (jun)