New finding on graft allegation at Balongan found

The Balongan refinery plant, owned by state oil and gas firm Pertamina, has been the source of corruption, collusion and nepotism practices for years. And a new finding shows that Balongan plant had marked-up of up to US$900,000 in the purchase of unreliable spare part.

According to Mumtaz Malik, coordinator for economy, finance and industry in the Presidium for Total Reform Surveillance (PPRT), revealed that Pertamina initially planned to hold an open tender for the purchase of connecting tube for Balongan. But later, Pertamina canceled the open tender and decided instead to hold a closed tender.

Mumtaz explained that the open tendering for the tube was canceled following a memorandum from Pertamina No.330/E0400/2000-S2, dated July 27, 2000, and signed by Pertamina processing director Ariffi Nawawi and the head of engineering department at the directorate of processing, Suwito Brodjo Pangarso.

Pertamina then appointed Foster Wheler to produce the tube for Balongan, with Elnusa Petro Teknik - a company linked to former Soeharto family -- acting as the "middleman," with a price marked up by $900,000.

But the tube produced by Foster Wheler broke down and forced the refinery plant to stop production for sometimes, and this had caused fuel scarcity in Jakarta and other parts of Java a few months ago.

Balongan suffered about US$10 million from the stoppage of its production.

Mumtaz said that he had reported about the new finding to House deputy speaker Muhaimin Iskandar and suggested that the House form a special committee to probe graft allegations at Balonga.

According to Mumtaz, Muhaimin supported the idea of forming a special committee for Balongan. (*)