Tue, 09 May 2000

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)