Minister accused of role in KBC debacle
Minister accused of role in KBC debacle
Privately, Indonesian professional groups are pushing for the
authorities to investigate Minister of Energy and Mineral
Resources Purnomo Yusgiantoro in connection with the Karaha Bodas
corruption case.
The Madani Professional Society, a grouping of Muslim
professionals, has urged police to expand the investigation into
Purnomo, while another group, the Indonesian Advocacy Reform
Institute (LARI), has reported the minister's involvement in
Karaha to the Anticorruption Commission.
It is not yet known if either the police or the commission
will move against Purnomo.
His involvement in Karaha dates back to 1989 when he was
appointed as a consultant to PT Sumarah Dayasakti, which owns a
10 percent stake in the Karaha Bodas Company (KBC). KBC was the
main investor in the aborted Karaha Bodas geothermal power plant.
During the early 1990s, Purnomo became a member of the
Geothermal Implementation Team at the Ministry of Mining and
Energy, which was also known as the Team Nine -- because it had
nine members.
The team advised the minister about geothermal matters,
including about how to award contracts to private investors and
negotiate electricity prices.
Based on its advice, the minister endorsed KBC's proposal and
later, KBC signed an operations and energy sales contract with
Pertamina and PLN to supply power at what analysts now consider
exorbitant prices.
Following the signing, KBC paid a US$10 million "commitment
fee" to parties involved in the deal. LARI alleges Purnomo was
one of the parties who received the money.
Purnomo has denied the allegations but did not deny he was a
consultant working for PT Sumarah and at the same time as he was
a member of Team Nine -- an apparent conflict of interest.
The minister said the corruption in Karaha Bodas emerged
because Pertamina and PLN had lost an earlier international
arbitration court ruling against KBC.
If Pertamina and PLN had won the arbitration, the corruption
case would not have emerged, he said. -- JP