Kortas Tipikor Names Two Suspects in PTPN XI Sugar Factory Case

The Corruption Eradication Corps (Kortas Tipikor) of the Indonesian National Police has named two suspects in a corruption case concerning the modernisation of the Assembagoes sugar factory in Situbondo, owned by PTPN XI. Kabag Ops of Kortas Tipikor Polri, Senior Commissioner Ahmad Yusuf Afandi, stated that the two suspects are DPP, who served as President Director of PTPN XI for the 2015-2017 period, and TD, the President Director of PT Multinas Indonesia. “Based on valid and sufficient evidence in accordance with Article 235 paragraph 1 of the Criminal Procedure Code, suspects were named on 2 July 2024, where investigators designated two individuals as suspects,” he said at the National Police Headquarters on Tuesday (7/7). Based on his role, DPP allegedly conditioned the procurement process by passing a company that did not meet the requirements. Furthermore, DPP was tasked with directing the formation of the Wika-Barata-Multinas (WBM) joint operation consortium and inflating the owner’s estimate to benefit certain parties. Meanwhile, suspect TD is alleged to have failed to execute the project according to the contract. In the project planning phase, TD did not involve a technology provider as required by the specifications. “He also failed to fulfil the obligation to issue a performance guarantee, resulting in the commissioning stage not being carried out as it should have been,” he added. Kortas Tipikor Polri had previously been investigating the alleged corruption in the development project of the Assembagoes sugar factory in Situbondo, owned by PTPN XI. The project ran from 2016 to 2022 and was based on modernisation using an engineering, procurement, construction, and commissioning (EPCC) scheme. Initiated as part of a strategic state-owned enterprise programme, the project received funding from State Capital Participation amounting to Rp650 billion, with additional loans totalling more than Rp462 billion. However, during its execution, it was discovered that the main contractor, the Wika-Barata-Multina joint operation, did not involve parties with expertise in sugar technology. The project also failed to meet several promised performance guarantees, such as milling capacity, product quality, and electricity production for export. PTPN XI terminated the contract with the Wika-Barata-Multina joint operation after it failed to meet the conditions stipulated in the contract. Total payments made by PTPN XI to the contractor reached 99.3 percent of the contract value, which amounted to Rp716.6 billion.