Some Soeharto-linked firms to keep Pertamina contracts

JAKARTA (JP): State oil and gas company Pertamina said yesterday it would maintain its contracts with former president Soeharto-linked contractors and suppliers, provided they were efficient and the government allowed them to continue their operations.

The secretary of Pertamina's board of commissioners, Rachmat Soedibjo, told The Jakarta Post that some Soeharto-linked companies were run efficiently.

From a technical point of view, he said, such companies deserved to continue operating.

However, he said, the future of Soeharto-linked companies' operations within Pertamina was not merely determined by technical considerations but also by political ones, since there was a growing demand from the public to reject all businesses connected to Soeharto.

"What Pertamina thinks technically good can be considered bad politically. It is thus the minister of mines and energy (Kuntoro Mangkusubroto), as the company's president commissioner, who will make a final decision," he said.

Rachmat is also the minister's expert aide for oil and gas affairs.

Pertamina is currently registering all its contractors and suppliers linked to Soeharto's family and cronies following the government's announcement last week to fight collusion, corruption and nepotism in the company.

Pertamina has been seen for a long time as the country's worst symbol of nepotism due to the domination of Soeharto's family and cronies in its operations.

Kuntoro said the government would review all Pertamina's contracts awarded to politically connected companies in an effort to improve its efficiency and management.

Pertamina president Soegianto said last week the company had thus far registered 120 politically connected contractors and suppliers. The final number could be higher as the listing has not yet been completed.

He said the list of companies would be further broken down into efficient and inefficient categories.

Rachmat said that although the companies initially gained contracts thanks to their political connections, some of them could work efficiently.

One of them, he said, is the shipment of Pertamina's liquefied natural gas (LNG) by the publicly listed shipping company PT Humpuss Intermoda Transportasi, controlled by Soeharto's youngest son Hutomo Mandala Putra, alias Tommy.

The company's 1997 annual report says the company currently operates three tankers to ship Pertamina's LNG, including the world's largest LNG tanker of 78,988 deadweight tons (DWT), called Darmaputra.

The tanker, which is 95 percent owned by Humpuss and 5 percent by Japan's Mitsui OSK Lines, was contracted to Pertamina for 20 years until 2010.

Pertamina has also contracted eight Humpuss' tankers to ship its crude oil to export markets until between 2005 and 2009.

Rachmat did not say if Humpuss also operated efficiently in shipping Pertamina's crude oil. (jsk)