Indication of KKN strong in KBC project

Indonesian Institutional Reforms Advocacy Group chairman Eddy Sumarsono said that there were strong indications of corruption, collision and nepotism (KKN) practices in geothermal power company Karaha Bodas Company (KBC) case, the Investor Daily Indonesia newspaper reported in its Monday edition.

That?s why, state oil and gas company PT Pertamina must stick to its position of not paying compensation demanded by KBC.

According to Eddy, who sent a written statement to Investor Daily on Sunday, said that there were indications of corruption as well as mark-up in KBC?s investment amount. KBC claimed that it had spent US$93.1 million. But in its tax return, the company admitted that it had spent only $84.9 million.

?It (KBC) also claimed that it had found 210 megawatts of energy potentials but in reality it was only 30 megawatts,? he said.

On Oct. 4, the U.S. Supreme Court rejected Pertamina?s bid to nullify the 2000 arbitration award to KBC

This decision puts Pertamina?s assets in the U.S. under major threat. According to the latest news, KBC has seized over US$29 million from the Pertamina?s 15 bank accounts.

Separately, Pertamina?s president director Widya Purnama said he would not pay a single penny to KBC.

?Please note down, Pertamina will not pay. If it is told to pay, I will resign from my post. I am not playing,? Widya said.

Due to 1997 Asian fnancial crisis, KBC?s power plant project at Garut, West Java was cancelled. (*)