Minister Sjarifudin defends troubled PTP Agrintara

Minister Sjarifudin defends troubled PTP Agrintara

JAKARTA (JP): Minister of Agriculture Sjarifudin Baharsjah
continued to defend PTP Agrintara yesterday, saying it had been
sold cheap crude palm oil (CPO) to help stabilize domestic
cooking oil prices.

Sjarifudin said, however, that he had ordered the Ministry of
Agriculture's Joint Marketing Board to stop selling CPO -- the
raw material used in olein and cooking oil -- to Agrintara at
reduced prices.

State-owned palm oil plantations sell their produce to the
Joint Marketing Board.

"The allocations (at special prices) will not continue. But if
I consider that the stability of (cooking oil) prices is
threatened, I will use Agrintara (for stabilization). Why not?"
Sjarifudin said during a break of a hearing of House Commission
IV on agriculture and forestry.

Asked whether this move would overlap with the National
Logistics Agency's (Bulog) task, Sjarifudin said: "State-owned
companies must also be responsible."

Earlier this year, Agrintara, a quasi-private company, was
accused of engaging in fraud, involving Sjarifudin's close friend
and associate, Burhanuddin Bey.

Critics said the firm made questionable deals with two
contractors, PT Mestika Karunia and PT Kalpataru Semesta, both of
which are controlled by Burhanuddin.

It is alleged the contractors failed to build a rubber goods
factory and a palm oil refinery for Agrintara on time. The
contractors were also said to have used obsolete equipment in the
new factories.

It was alleged that The Joint Marketing Board had sold
Agrintara 30,000 tons of subsidized CPO a month since last
December, even though its palm oil refinery only started
production this month.

The critics said the Joint Marketing Board had sold CPO to
Agrintara for the same price that it had sold it to Bulog, which
needs a buffer-stock of CPO to control prices and for national
emergencies.

CPO was sold to Bulog and Agrintara for Rp 950 (US$0.19) per
kilogram. Private companies pay Rp 1,337 per kg for CPO.

Sjarifudin said yesterday that the sale of CPO to Agrintara at
the Bulog price from January to March this year would be
suspended. Agrintara must now buy CPO at commercial prices.

"I am happy to inform you that the allocations given (at the
Bulog price) to Agrintara in the January to March period were to
help stabilize domestic cooking oil prices," he told House
members before the hearing.

"Since then, Agrintara has asked me to no longer allocate
(CPO) to it at a special price, but insists on buying it at
market prices like all other refineries in the country," he said.

He refuted the allegation that Agrintara had been exporting
the CPO from the Joint Marketing Board, neglecting the domestic
market and reducing Bulog's buffer-stock of CPO.

"I have not received reports of such exports," Sjarifudin
said.

Agrintara was set up as a holding company for downstream
industrial plants in December 1992 by the 26 state-owned
plantation companies, before they were merged into 14
corporations in March.

In February 1993, Minister of Finance Mar'ie Muhammad allowed
Agrintara to become a quasi-private company to increase
management autonomy and operational flexibility. The change
released it from the arduous procurement procedures imposed on
state companies.

This ruling has led to a differences over which agency may
audit the company. Earlier this year, Agrintara refused to be
audited by the Development and Finance Comptroller, arguing that
it was no longer a state entity. (pwn)