Sigit denies role in alleged Balongan graft

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)