Pertamina to undergo fundamental change
JAKARTA (JP): Minister of Mines and Energy Kuntoro Mangkusubroto pledged yesterday to introduce fundamental changes to the operations of state oil and gas company Pertamina.
The minister said a massive restructuring would be carried out to boost efficiency and turn Pertamina into a world-class enterprise.
"We shall make Pertamina a world-class oil company by 2003, just like Petronas (of Malaysia)," Kuntoro said.
To achieve that, he promised to first root out the corruption, collusion and nepotism that has long gripped Pertamina's operations and caused inefficiency.
Pertamina is long considered by people as the country's worst symbol of nepotism due to the fact the company awarded most of its contracts and projects to former president Soeharto's children and cronies during his 32-year presidency.
"I don't want to blame a certain group of people. Former directors of Pertamina and officials at the Ministry of Mines and Energy might also have been involved in nepotistic practices," Kuntoro said.
Kuntoro recently ordered Pertamina to list all its contractors and suppliers who are linked to Soeharto and former company and government officials.
"My goal is to make Pertamina an efficient company and have an orderly administration. I will finish them (the contractors and suppliers) off, whoever they are, as long as their operations are in conflict with this goal," Kuntoro said.
Thus far, Pertamina has found at least 120 companies which landed projects from Pertamina through political connections and other unsavory business practices. The number could be higher as the investigation by the state company is still ongoing.
Pertamina has yet to reveal the list but analysts believe it includes Perta Oil Marketing Ltd and Permindo Trading Oil Co. Ltd, from which Pertamina has been obliged to buy imported fuel and crude oil for decades.
Sources say Perta is 30 percent owned by Pertamina, 20 percent by Pertamina's pension fund, 25 percent by the Nusamba Group, controlled by Soeharto's crony Mohamad "Bob" Hasan and 25 percent by Soeharto's youngest son Hutomo Mandala Putra, alias Tommy.
Permindo is 35 percent owned by Pertamina and 65 percent by Mindo Petroleum. Mindo is owned by Bambang Trihatmodjo (14.1 percent), Soeharto's cousin Sudwikatmono (20.6), Soeharto's son- in-law Indra Rukmana (14.1), Nirwan Bakrie (22.8), Syarief Sutardjo (7.6), Mohammad Tachriel Sap'ie (7.1), Rossano Barack (7.1) and Aminusal Amien (6.6).
Soeharto's family and cronies also control the shipping of crude oil and liquefied natural gas (LNG) and the development of LNG plants.
Reform
Kuntoro said he had revoked the decree issued by the ministry's Directorate General of Mining which granted PT Artha Daya Coalindo the monopoly over the trading of the coal received by the government from all coal mining contracts of work.
The existing law requires coal mining contractors to hand over 13.5 percent of their output in royalties to the government.
This is valued at about Rp 400 billion (US$36 million) per year.
Former director general of mining Adjat Sudradjat granted the monopoly to the company late last year on the approval of then minister of mines and energy I.B. Sudjana.
Informed sources say Artha Daya is owned by businessmen linked to Soeharto and Sudjana.
Kuntoro has also revoked the decree issued by Sudjana which transfers the right of licensing mining contracts of work from the director general of mining to the minister.
Sudjana issued the decree in 1996 when the Directorate General of Mining was led by Kuntoro.
Beginning in June, the licensing right will be returned to the Directorate General of Mining, he said.
Kuntoro promised to root out collusion, corruption, and nepotism at the ministry in response to the public's demand for reform and clean government.
He pledged to revamp all mining and energy legislation to boost investment in the sector.
The ministerial offices would also be revamped to create "an efficient, public-service-oriented, and modern bureaucracy in anticipation of the 21th century," he said. (jsk)