Ministers at odds on Soeharto kin contracts review

Ministers at odds on Soeharto kin contracts review

JAKARTA (JP): Two ministers sent out mixed signals on Thursday
concerning the government's progress in reviewing the slew of
business contracts signed with children of former president
Soeharto and his longtime associate Mohamad "Bob" Hasan.

Minister of Communications Giri Suseno Hadihardjono said he
would continue discussions with Coordinating Minister for
Development Supervision and State Administrative Reforms Hartarto
Sastrosoenarto to decide what action should be taken on the
projects related to his ministry.

"We are still reviewing whether the services rendered by the
projects are needed or not. Let's wait until our elaboration
process is completed," he told reporters on the sidelines of a
telecommunications seminar.

Giri's comments seemingly contradicted Hartarto's announcement
on Tuesday that the government was moving forward in reviewing
and severing many business contracts obtained largely as a result
of political connections with the former first family.

The announcement is part of the latest campaign measures by
President B.J. Habibie's administration to clean up the
bureaucracy from corruption, collusion and nepotism.

State railway operator Perumka is reviewing four contracts
deemed disadvantageous to the government.

They are the coal transportation deal in South Sumatra with PT
Intra Sarana Manunggal (owned by Soeharto's son Bambang
Trihatmodjo and daughter Mamiek Soeharto), the Wonokromo-Tanjung
Perak toll road in Central Java with PT Tri Daya Esta (Bambang),
and the construction of the triple tier transportation system in
Jakarta and the construction of an integrated railway/bus
terminal in Manggarai, both under Soeharto's eldest daughter Siti
"Tutut" Hardijanti Rukmana.

The projects are all related to the Ministry of
Communications.

Giri explained that if the services from the projects were
still needed, the government would find ways to finance their
continuation, including through loans and new investors.

"Whether the current form (contract) will be continued or not
can only be answered after the (elaboration) process is
completed."

Pressed by reporters, he added: "Please also note that most of
the projects are related to the State Ministry of the Empowerment
of State Enterprises. So actually it's now the business of Tanri
Abeng."

Asked whether the review would save a lot of state money, he
said: "I don't know yet. We're still reviewing whether the funds
already disbursed can still benefit us."

He said funds appropriated for land purchases for port
construction were justified because the government needed the
transportation facility.

"The question is where will we get the money for the
construction," he added.

Hartarto had said Soeharto's sons Hutomo "Tommy" Mandala Putra
and Bambang, as well as Hasan, had been terminated from many
lucrative deals with the state oil company PT Pertamina,
including shipment of liquefied natural gas (LNG) and their
intermediary role in oil trading.

Hartarto claimed the move would save Pertamina US$82.76
million annually.

In another apparent contradiction, Minister of Mines and
Energy Kuntoro Mangkusubroto said Thursday that Pertamina had yet
to terminate the contracts for the LNG transportation.

"No contracts on LNG transportation have been annulled," he
said on the sidelines of the first national congress of the
Indonesian Electric Power Society.

LNG transportation contracts were awarded to Tommy's listed
firm PT Humpuss Intermoda Transportation and Bambang's PT
Samudera Petrindo.

Humpuss gained a 20-year contract to ship LNG from Bontang,
East Kalimantan, to Taiwan and Japan, while Samudera holds long-
term contracts to export from Arun in Aceh to several countries.

Kuntoro said the contracts were currently being reviewed by
Pertamina and a decision was still pending.

He said Pertamina had terminated a couple of other contracts
with Bambang and Tommy.

Since the resignation of Soeharto on May 21, the Habibie
administration has been under strong pressure to make a clean
break from the corruption, collusion and nepotism which defined
the rule of the preceding government.

None of the favored businesspeople during the Soeharto era
have been brought to court for alleged misdeeds, although
investigations into Hasan and several other bankers have been
started on suspicion of banking crime. (rei/jsk)