Soeharto family web spans 120 Pertamina associates

JAKARTA (JP): State oil and gas company Pertamina has identified at least 120 companies operating as its contractors or suppliers which are owned by former president Soeharto's family and cronies.

Pertamina president Soegianto said yesterday the number could be higher as the listing of companies which landed projects from Pertamina through political connections and other unsavory business practices was still tentative.

"The final list will be sent to Minister (of Mines and Energy Kuntoro Mangkusubroto) within days," Soegianto said.

Kuntoro recently announced the government would review all contracts between Pertamina and shipping, exploration and trading companies to improve its efficiency.

He ordered Pertamina to register all companies which had gained contracts through collusion, corruption and nepotism.

Kuntoro said yesterday he would give Pertamina freedom to decide if contracts involving Soeharto's children and friends could continue.

He emphasized that any decision should be aimed at improving the company's efficiency.

"Pertamina will decide if a project will continue or not. I will only give a directive (that any decision must be made) to improve efficiency," Kuntoro said.

Pertamina has long been blamed for inefficiency due to alleged rampant internal collusion and corruption.

Analyst say corruption in the company mainly resulted from the deep involvement of Soeharto's family and cronies in its operation.

The extensive Soeharto web enjoyed for decades exclusive rights to Pertamina's operation, including imports of fuel and crude oil, shipment of crude oil and liquefied natural gas (LNG) and development of LNG plants.

Pertamina was obliged to buy imported fuel and crude oil from Perta Oil Marketing Ltd and Permindo Trading Oil Co Ltd for decades.

Pertamina has a 30 percent stake in Perta, while the remainder is owned by Soeharto's son Hutomo "Tommy" Mandala Putra.

The state company has a 35 percent stake in Permindo, while the remainder is owned by President Soeharto's son Bambang Trihatmodjo, Soeharto's cousin Sudwikatmono, Nirwan Bakrie and Roosano Barack.

Tommy also conducts business with Pertamina in the shipment of fuel, LNG and crude oil through its publicly listed company Humpuss Intermoda Transportasi.

In its 1997 annual report, Humpuss said Pertamina chartered nine tankers from its fleet to transport crude oil and another three tankers to carry liquefied natural gas (LNG) to export markets. The charter period of the tankers range from 10 to 12 years.

Some of the tankers are co-owned by Japanese investors.

Kuntoro said foreign investors who formed partnerships with Soeharto's family and friends would have to accept reviews of their status.

"That's the risk of a marriage," he said. (jsk)