President Soeharto's Fury Unblocks Funding for Strategic Asahan Project

President Soeharto once expressed fury and directly reprimanded his entire economic cabinet after the budget for the Asahan mega-project stalled for a year. The project, a major industrial and hydroelectric cooperation between Indonesia and a consortium of Japanese companies, was signed on 6 July 1975. According to PT INALUM, the Asahan Project utilized the flow of the Asahan River in North Sumatra as a power source for a hydroelectric plant to supply an aluminium smelter. At the time, it was one of the largest investments in Indonesia, valued at 411 billion yen or approximately Rp1.7 trillion. Despite the agreement, the necessary government funding to support the construction had not been disbursed a year later. A.R. Soehoed, a trusted aide of the president appointed as Chairman of the Asahan Project Authority, repeatedly attempted to resolve the issue with the relevant ministers but received no certainty. After his efforts failed, Soehoed reported the deadlock directly to President Soeharto. Initially, the president asked him to coordinate again with the economic ministers, but the result remained nil. Soehoed then reported back to Soeharto, recounting that the president’s face turned red with anger. Soeharto summoned the entire economic cabinet to his residence. In the meeting, he rebuked his ministers, telling them they must realise the Asahan Project was critically important for the future of national industry and required sufficient budget support. Following this tense meeting, the budget was finally released, allowing construction to proceed. The project was eventually completed and inaugurated by President Soeharto on 6 November 1984. The cooperation with the Japanese consortium concluded on 9 December 2013, after which full ownership of the project was transferred to the Indonesian government through the state-owned enterprise PT Indonesia Asahan Aluminium (INALUM).