Pelindo's boss denies graft charges

Pelindo's boss denies graft charges

JAKARTA (JP): President of state-owned port operator PT
Pelindo II, Hendra Prayitno, denied on Monday allegations of
corruption and collusion in the sale of Pelindo's container port
operator subsidiary, PT Jakarta International Container Terminal
(JICT), leveled against him by several parties.

He said the bidding process and award of the 51 percent stake
in JICT worth US$215 million to Grosbeak Pte Ltd in March last
year were conducted properly in accordance with regulations.

"That (the accusation) is not true. It is groundless. No KKN
practices (an acronym for corruption, collusion and cronyism)
were involved in the privatization process," he said.

He said Grosbeak was selected because it had a greater port
network around the globe compared to the other bidders and had
the capability to increase JICT's capacities.

Hendra said the decision to sell JICT's stakes to a foreign
strategic partner was made solely by the government through the
office of State Ministry of Investment and State Enterprises
Development.

He also challenged parties that accused him to prove his
wrongdoing by checking the documents on the privatization kept by
his office and other related government offices.

Hendra was speaking at a dialogue on the alleged corruption
and collusion involving Hendra and former State Minister of State
Enterprises Development Tanri Abeng in last year's sales of JICT
stakes held jointly by the Institute of Indonesian Reform
Advocacy and JICT's labor union.

The institute and JICT's labor union have accused Tanri and
Hendra of engineering the process of JICT's privatization for
their personal interests.

Institute chairman Eddy Sumarsono said Tanri and Herman had
allegedly collected money from Grosbeak in return for selling
JICT's stakes at a very cheap price.

Eddy said JICT's stake could have been worth $350 million had
Tanri sold it in a more transparent and corruption-free way
through the stock market.

He claimed that only $190 million of the total $215 million
paid by Grosbeak went to the state's coffers.

"The remaining $25 million, was left in the terminal
operator's bank account, but its use was unclear," he said,
adding that some Rp 60 billion, for example, was used for
consultation fees.

Eddy said the group's findings on Tanri and Hendra's alleged
corruption would be reported to the Attorney General and the
Ministry of Finance office in the near future.

The government sold 51 percent of the JICT stake in March last
year to Grosbeak Pte Ltd, which is a 100 percent owned subsidiary
of the world's largest independent container port operator
Hutchinson Port Holdings, for $215 million in cash.

Grosbeak outbid the other three bidders, the International
Container Terminal Services Inc. of the Philippines, P&O Ports of
Australia and Stevedoring Services of America International/PT
Samudera Indonesia, in the final round of the bidding to win the
20-year concession period to operate two container terminals at
Tanjung Priok Port, the country's largest and busiest seaport.

Under the agreement, Grosbeak is required to make a noncash
contribution of container terminal operation software and
technical start-up support for JICT valued at approximately $28
million.

During the operating period, JICT will invest approximately
$340 million for the optimization of existing capacity and the
construction and development of additional berths and container
yards.

After the operating period expires, full control of JICT will
revert to Pelindo II. (cst)