Sigit denies role in alleged Balongan graft

JAKARTA (JP): The oldest son of former president Soeharto denied on Wednesday involvement in alleged corruption in the Balongan oil refinery project.

Sigit Harjojudanto said he took no active part during the project's negotiation period or when the government approved the construction of the refinery.

"I only gave my opinions," Sigit said in a hearing with House Commission VIII in charge of mines and energy.

House members questioned him following accusations by former top officials of state oil and gas company Pertamina that Sigit and his associates pressured them to approve the project, which was wholly owned by Pertamina.

The US$2 billion refinery in Indramayu, West Java, was built from 1990 to 1995 by a consortium of contractors led by Foster Wheeler of Britain. It has a processing capacity of 125,000 barrels per day.

The cost of the project was allegedly marked up, with legislators citing the realistic cost to be around $1.6 billion.

Sigit denied having benefited from the project.

"I received no fees, either from Foster Wheeler or from Pertamina," he said.

Also attending the hearing were Kho, a former expert staff to the then minister of mines and energy Ginandjar Kartasasmita, and former presidential guard commander Parnowo, both of whom have been linked to Sigit.

Sigit's relative Erry Oudang, who represented Foster Wheeler during negotiations with Pertamina, was also present.

In professing his distance from the project, Sigit said he even declined to arrange a meeting for Erry with Soeharto.

Despite Sigit's brief answers, House members appeared satisfied with his explanation. They focused their questioning on Kho and Erry, whom they viewed as key figures behind the alleged graft.

"Based on our data, Sigit only attended one meeting between Foster & Wheeler and Pertamina, which was when they signed the contract," head of Commission VIII Irwan Prayitno said.

He said Sigit took a passive role during the negotiation process, while Kho and Erry were actively involved in getting the project up and going.

Irwan said that while Erry had possibly misused Sigit's influential name in pushing the project ahead, it was Kho's positive analysis of the project's feasibility that led the government to justify Balongan's construction.

Pertamina insisted during talks with Foster Wheeler that the project cost should not exceed $1.7 billion, but later softened its stance, allegedly based on Kho's analysis of $1.9 billion as a feasible amount.

Kho said he did not know if a letter he sent influenced Ginandjar's decision in approving the project. "The letter was not meant to be used by Pertamina as a recommendation," he added.

He said he did not recommend certain price levels, but instead asked the government to set a ceiling price for the project, which it never did.

"Pertamina could not have been pressured to pay that much if the government had set a ceiling price."

Kho also charged Pertamina's refinery operators as incapable of running the Balongan refinery.

Pertamina has repeatedly shut down the refinery due to alleged technical problems.

"There were no problems when we had foreign operators but as soon as they left and were replaced with Pertamina operators, the problems occurred," Kho said.

Erry denied he pressured Pertamina and said it was impossible to mark up the project's cost.

"There were two major groups here, the engineering companies and the lending institutions. Would they really have accepted a marked-up project?" Erry said.

Pranowo admitted that he attended the negotiations but felt he did not exert pressure on Pertamina to sign the contract with Foster Wheeler.

The hearing was also attended by Soeharto lawyer's Felix Juan Tampubulon, who represents Sigit, Erry and Pranowo.

Prior to the hearing, Felix, in a letter addressed to Commission VIII, called on House members to restrain themselves during questioning and honor his clients' rights.

Commission VIII concluded that mark-up practices were apparent and recommended the Attorney General's Office follow up on the hearing.

Last year, an investigation led by then attorney general Muhammad Ghalib implicated former Pertamina president Faisal Abda'oe and former Pertamina processing director Tabrani Ismail in the alleged graft. Ghalib's report was largely ignored after he submitted it to then president B.J. Habibie in May 1999. (bkm)