Attorney General and alleged graft in Balongan refinery project

The explanation on the alleged corruption, collusion and nepotism (KKN) practices in the Balongan refinery project given by Attorney General Marzuki Darusman before the House of Representatives' Commission VIII on Tuesday (Feb. 13) only angered some members of the commission.

Legislators Nur Hasan of the Nation's Awakening Party faction, Noor Adenan Razak of the Reform faction and Hari SF Sohar of the Golkar faction were especially angered by Marzuki's conclusion that his office could not yet find any indication of KKN practices in the Export-Oriented (Exor) I Balongan project.

"The public has known that there are mark-up practices in Balongan. So, the attorney general has hurt the people's hearts," the legislators claimed. They even demanded Marzuki to step down if he could not bring corrupters to court.

They are apparently dissatisfied with the attorney general's works. Why?

The Attorney General's Office has actually found some indications of ill conducts in its preliminary investigation into the Balongan case. Based on data it got from various sources, including by questioning a number of key players in Balongan refinery, the Attorney General's Office found out that there was the role of Erry Putra Oudang and Bing Cintamani, and to some extend Sigit Hardjojudanto (former president Soeharto's eldest son) in the making of the project.

The idea of the project started when then British prime minister Margaret Thatcher offered Indonesia an export oriented refinery project during her visit to Jakarta in 1985. The offer was followed up by state oil and gas company Pertamina and British investor Foster Wheeler.

In their initial agreement, Pertamina agreed to cooperate with Foster Wheeler as the leader of consortium and contractor for the engineering, procurement and construction of the project, while British Petroleum would act as off-taker of the project's fuel products.

Foster Wheeler then filed its offer to Pertamina. But then, it was not processed quickly, and from here, emerged the role of Erry and Bing, and later Sigit, to press Pertamina directors to expedite the process of approval from Pertamina. And the project was approved. And Erry got US$60 million or 4 percent of the project value in commission fee.

The project then commenced with total investment of US$938.6 million, including $60 million of grant given by the British government and $140 million of soft loan from Export Credit Guarantee Department. The remaining $738 million was funded by a syndication of international banks.

The Attorney General's Office have questioned all key players in the Balongan case, including former mines and energy ministers Prof Soebroto and Ginandjar Kartasasmita, Radius Prawiro, AR Ramli, and an expert staff at the office of state minister of research and technology, Kho Khian Hoo. But thus far, the Attorney General's Office could not yet find any indication of mark-up at Exor I Balongan project.

Because of demands from legislators, Attorney General Marzuki promised to proceed with further investigation with the case. This month, the Attorney General's Office, together with the Finance Development Comptroller and Pertamina, would conduct physical investigation against the project.

The Attorney General's Office would also question again some key players, including Ginandjar, currently undergoing visiting scholarship program at the Harvard University in the United States, to get new evidence for mark-up practices in the project.

And legislators gave Attorney General Marzuki three-month time to complete the investigation into Balongan and then bring all the suspects to the court. Can Marzuki do that? (*)