Former Pertamina president Abda'oe declared suspect for Balongan-Jakarta piping project

Faisal Abda'oe, former president of state oil and gas firm Pertamina, has been declared a suspect of graft cases in the Balongan (West Java)- Jakarta fuel piping project and the flowed awarding of technical assistance contracts (TAC) for a number of oil fields in Bunyu and Sumatra.

Besides Abda'oe, the Attorney General's Office, also named Rosano Barack, an executive of Bimantara Citra and president of PT Triharsa Bimanusa Tunggal (TBT), the contractor for the construction of the piping project, as a suspect.

The Attorney General's Office spokesman Muljohardjo said that the graft case in the piping project had caused the government to suffer losses of about US$20.4 million.

According to Muljohardjo, Pertamina and TBT signed a contract for the construction of the Balongan-Jakarta piping project on May 1, 1989 based on the build and transfer agreement and through put fee payment agreement.

Based on the contract, the funding for the project would be provided by TBT and Pertamina would pay TBT based on the flow of fuels through the piping line in the period of 10 years. And the build and transfer agreement came into effect on Nov. 1, 1990, based on the memorandum of understanding signed by both parties.

However, the contract signed by Pertamina was rejected by the Directorate of Budget at the Ministry of Finance, and therefore, the contract was not enforceable. At the same time, TBT had been building some of the piping project and spent $49.29 million.

Rosano then wrote a letter to Faisal, asking him to cancel the contract signed between Pertamina and TBT. Rosano also asked Pertamina to pay TBT based on the work it had completed. Faisal agreed to pay TBT, noting that it had been approved by the coordinating minister of economy, finance and industry and the coordinating minister for development supervision. And this had caused the government to suffer losses of US$20.4 million.

Besides the piping project, Faisal had also been named as a suspect in the graft case of TAC in Bunyu and Sumatra. Faisal was allegedly signed a fictitious TAC contracts with PT Ustraindo Petro Gas (UPG) to manage still-producing oil wells in Bunyu, Prabumulih and Pendopo oil fields in December 1992 and February 1993. In the contracts, it was stated that as if those wells needed technical assistance from UPG. In fact those wells were still producing and had no problems. This case inflicted losses to the government of up to US$17.47 million.

Muljohardjo said his office would also name Faisal's friends in the TAC case as suspects. But he did not yet disclose who they were. (*)