Pertamina pledges to root out corrupt, collusive practices
JAKARTA (JP): State oil and gas company Pertamina pledged yesterday to rid its business operations of cronyism, collusion and nepotism.
Pertamina president Soegianto said yesterday the company was currently collecting information about all the companies which had obtained contracts from Pertamina thanks to connections with former president Soeharto.
He said the measure was being taken on the instructions of Minister of Mines and Energy Kuntoro Mangkusubroto's, who asked Pertamina to review all of its contracts with shipping and trading companies in an effort to free the company of corruption and collusion.
Soeharto's children and cronies enjoyed exclusive rights over a number of business activities associated with Pertamina, including the import and shipping of fuel and crude oil.
Soegianto said companies involved would be reported to the government, which would later decide if the people involved should be banned from doing further business with Pertamina.
"If they want to continue business with Pertamina, they should follow fair and sound practices. But I doubt if they will want to continue," Soegianto said at a one-day seminar on oil and electricity organized by the Management Students' Society from University of Indonesia's faculty of economics.
Under Soeharto's government, Pertamina were for decades obliged to buy imported fuel and crude oil from Perta Oil Marketing Ltd and Permindo Trading Oil Co Ltd.
Pertamina has a 30 percent stake in Penta, while the remaining 70 percent is owned by Soeharto's youngest son Hutomo Mandala Putra, alias Tommy.
Pertamina also holds a 35 percent stake in Permindo, however the remaining 65 percent is owned by Bambang Trihatmodjo, Soeharto's second son; Sudwikatmono, Soeharto's cousin; Nirwan Bakrie; and Roosano Barack.
Tommy also ships fuel, LNG, and crude oil for Pertamina through his publicly listed company Humpuss Intermoda Transportasi.
The company said in its 1997 annual report that Pertamina chartered nine tankers from the company to transport crude oil, and a further three tankers to ship liquefied natural gas (LNG) to export markets. The charter period for the tankers ranged from ten to 12 years.
Informed sources at Pertamina said that Bambang had also been granted the exclusive right to arrange financing for the development of all LNG plants in the country.
Soegianto said the elimination of collusion, cronyism and nepotism would improve Pertamina's efficiency.
He also said Pertamina would close its marketing offices in London, Singapore, and Houston later this year to further improve efficiency, but its marketing office in Tokyo would remain open because Japan was the largest market for Indonesian crude oil.
Soegianto acknowledged that Pertamina had given the five ministers from the 1993/1998 cabinet who served as company commissioners -- the Minister of Mines and Energy, the State Minister for National Development Planning, the State Minister for Research and Technology, the Minister of Finance, and the Minister/State Secretary -- Rp 1 billion (US$100,000) each for undertaking Pertamina-related activities.
"Let the commissioners judge if these payments are still necessary," Soegianto said.
Paiton
In a related development, East Java provincial authorities announced yesterday that they would review all projects in the province which involved Soeharto's children.
"We shall have to judge if they are still capable of carrying out these projects. Otherwise, we shall give the projects to other investors," East Java governor Basofi Sudirman was quoted by Antara as having said.
"Anyhow, which investors are capable of seeing through big projects during the current difficult situation?" Basofi asked.
Soeharto's family are involved in projects worth billions of dollars in the province. Bambang and Soeharto's brother Probosutedjo own refinery projects in Situbondo and Probolinggo, both of which are in planning stages.
Bambang and his partners are also developing a 1,220 Megawatt (MW) coal-fired power plant in Paiton, and a toll road linking the Waru-Wonokromo-Juanda areas in East Surabaya. He is also developing a gas pipeline network from Pagerungan island in Madura to Surabaya and Sidoarjo.
Soeharto's daughter Siti Hardiyanti Rukmana, also known as Tutut, is behind the planned toll road linking the Waru-Juanda- Perak areas in East Surabaya, while the former presidents youngest son Tommy owns the Umbulan drinking water project. (jsk)