Soeharto grandson loses briquette deal
Soeharto grandson loses briquette deal
JAKARTA (JP): State coal mining company PT Tambang Batubara
Bukit Asam has terminated a contract with Ari Sigit
Hardjodjudanto -- a grandson of former president Soeharto -- for
the construction of five coal briquette factories in Java.
Director General of Mining at the Ministry of Mines and Energy
Rozik Boedioro Soetjipto said on Thursday the firm took the
action after receiving the government's approval.
The measure is part of the national efforts to scrap business
deals landed through corruption, collusion and nepotism.
Bukit Asam signed a build-and-transfer agreement with PT Ario
Seto Wijoyo, controlled by Ari Sigit, to build five coal
briquette plants. One each were planned for Serang, West Java;
Cilacap, Central Java; and Semarang, Central Java, plus two
plants in Gresik, East Java.
The plants, each with production capacity of 120,000 tons of
briquettes per annum, required total investment of Rp 80 billion
(US9.4 million).
Soeharto dedicated the first plant in Gresik upon its
completion last year.
The Rp 8.4 billion plant has only been running on 20 percent
of its designed capacity due to the poor quality of the machinery
installed by Ario Seto.
Rozik said Bukit Asam had filed complaints with Ario Seto over
the shoddy performance and was seeking to recover part of the
fund reimbursement to the company for the plant's construction.
"Fortunately, only one of the five plants has been built (by
Ario Seto)," Rozik said on the sidelines of a seminar on mining
and industrial investment.
Bukit Asam currently produces 14,500 tons of briquettes at
four production facilities, which also include one each at
Tanjung Enim, South Sumatra, and Tarahan, Lampung.
It plans to increase its coal briquette output to one million
tons in 2000 to anticipate an increase in demand for alternative
fuels.
The government is promoting the use of briquettes in several
industries as a substitute for kerosene to ease the government's
subsidy on oil products.
They are considered an excellent alternative due to the
country's abundant coal deposits, currently in excess of 36
billion tons. (jsk)