Thu, 20 Nov 2003

State secretary defends project of President's son

The Jakarta Post, Jakarta

State Secretary Bambang Kesowo defended on Wednesday the decision to grant President Megawati Soekarnoputri's son Mohammad Rizki Pratama rights to develop and manage a 17-hectare lot at the 40- hectare Kemayoran fairground complex, saying it was not in violation of law.

Bambang also stressed that he had known from the very beginning that Pratama, or Tatam as he is known, was involved in a project to develop a plot of land in Kemayoran, Central Jakarta.

"If he (Tatam) runs his business without taking any concession or selling state assets, but instead encourages foreign investors to invest, then why not?" Bambang said in a hearing with the House of Representatives Commission I, which is responsible for the State Secretariat, among other things.

Tatam, through PT Theda Persada Nusantara, has acquired the right to develop and manage 17 hectares of land at the Kemayoran fairground complex. The details of the project, however, remain unclear.

According to Bambang, Tatam had originally planned to build high quality apartments, a shopping center and a hypermarket worth up to Rp 6 trillion (US$750 million) on a 30-hectare lot in Kemayoran.

However, after due assessment the Kemayoran New Town Authority (DPPPKK) granted the company the right to develop only 17 hectares with the total project value being Rp 1.6 trillion.

Bambang, who is legally in charge of the Kemayoran fairground complex, did not explain why Tatam had only been granted 17 hectares.

PT Theda signed an agreement with Li Zhaoling (Chinese businessperson associated with the Beijing Returned Overseas Chinese Federation Partners) on July 29 to develop the site.

Lawmakers had criticized the selection of Tatam's company to develop the land, saying that the project should have been put out to tender.

Legislator Effendy Choirie of the National Awakening Party (PKB) has suggested that preferential treatment had been given to Tatam by his being allowed to control and develop the site in the Kemayoran commercial district without a public tender being held.

Some investors, including PT Astra and Pepabri (the association of retired military officers), had also submitted proposals but later withdrew them for unknown reasons.

Bambang emphasized that a public tender was not needed for a company which intended to develop a project. Currently, there is no law regulating the use of state assets.

He said that the Kemayoran complex was a state asset allocated for business, commercial information (Jakarta International Trade Fair), housing, and other supporting infrastructure, including shopping malls.

Like the Bung Karno Sports Compound, the Kemayoran fairground complex comes under the responsibility of the state secretary.

Bambang said Tatam did not do the negotiating himself. "The negotiations were conducted by officials at director level in the company," he said. Tatam is a member of the company's board of commissioners.

According to Bambang, the 44-hectare site in Kemayoran is not for sale, but investors are being encouraged to develop parts of the commercial complex.

"They take 17 hectare. The price is Rp 3 million per square meter," Bambang said, adding that the market price was Rp 2.5 million per square meter.

Bambang said that the price of the land will determine how much money will be contributed to the state once the developments have been completed.

The state secretary criticized lawmakers who accused the President of nepotism.

"We should not engage in character assassination without making a clear assessment of the issue," he said.

Several legislators suggested that the President should tell her son to quit the project for ethical reasons.