PGN-Pertamina JV

Two state-owned companies, PT Perusahaan Gas Negara (PGAS) Tbk and PT Pertamina, have finally signed the JV agreement for LNG floating storage and regasification terminal (FRST) to be built in West Java.

The JV agreement was signed today by PGAS CEO Hendi Prio Santoso and Pertamina CEO Karen Agustiawan, witnessed by SOEs minister Mustafa Abubakar and energy minister Darwin Zahedy Saleh.

According to the agreement, Pertamina controls 60% shares in the JV, while PGAS controls the balance. Pertamina will have its people as CEO and Director for operations of the JV, plus one commissioner, while PGAS will be represented by finance and administration director plus one commissioner.

LNG for the facility will be sourced from East Kalimantan for a combined 11.75 million tons in 11 years. The gas itself will be supplied to state-owned power producer PT Perusahaan Listrik Negara (PLN). The JV will start construction of the FRST this year.

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Rudiantara resigns from PLN

Rudiantara, vice president director of state-owned electricity company PT Perusahaan Listrik Negara (PLN) has tendered his resignation letter to SOEs ministry, Detik.com reported.

Rudiantara said he had professionally accomplished what he thinks he should do at PLN. He has been in the position since 2007. Rudiantara will soon get a new job he didn't disclose. He was director at PT Semen Gresik (SMGR) Tbk before PLN job and director at telecommunication company PT Excelcomindo Pratama (EXCL) Tbk before SMGR.

Government plans to install new CEO for PLN to replace Fahmi Mochtar. Jawa Pos CEO and owner Dahlan Iskan is considered the strongest candidate to replace Fahmi. Dahlan admitted he had signed a letter before President SBY last week for that job. There will be no vice president director position in the new structure of PLN management. So, resign before the job is no longer available!

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PQ for Senipah gas-fired power plant

State-owned electricity provider PT Perusahaan Listrik Negara (PLN) kicks off pre-qualification for Senipah gas-fired power plant project in East Kalimantan.

The gas-fired power plant will have 2x40 MW capacity as an independent power producer (IPP) project where investor will develop, finance, construct, and operate it on a build-own-operate (BOO) basis pursuant to a long-term power purchase agreement (PPA) up to 30 years.

Investors is also required to finance and construct the associated 150 kV transmission line, which will be transferred to PLN as a special facility.

Late last month, PT Total E&P Indonesia and Inpex Corporation signed gas sales agreement (GSA) with Perusahaan Kelistrikan dan Sumber Daya Energi (PKSDE), a company owned by Kutai Kartanegara administration to supply 20 MMSCFD of gas for 20 years. PKSDE and PT Toba Sejahtera are partners in the plan to build Senipah gas-fired power plant.

According to the GSA, buyer will pay US$3.5/MMBTU plus 3% raise every year for the period of 2011-2017, while for the period of 2018-2031, gas price will be US$4.5/MMBTU plus 3% raise per year and 30% of any electricity price hike to charged to PLN.

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ICON+ wins USO

PT Indonesia Comnet Plus (ICON+), a subsidiary of state utility firm PT Perusahaan Listrik Negara (PLN), wins two packages of universal service obligation (USO) for telecommunication in several provinces.

According to ICT Ministry, ICON+ wins package 4 (North Sulawesi, Gorontalo, Central Sulawesi, South Sulawesi, South East Sulawesi, Maluku, and North Maluku) with negotiated price of Rp274 billion. ICON+ competitor is PT Indonusa System Integrator.

The company also wins package 5 (Papua and West Papua provinces) with negotiated price of Rp455 billion. ICON+ is the only bidder for this package.

ICT Ministry had earlier named PT Telkomsel, a subsidiary of Telkom, as the winner of five other USO packages with combined offer of Rp1.64 trillion or about US$160 million.

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PLN rebids Bali power plant

PT Perusahaan Listrik Negara (PLN) will rebid the development of Bali Timur coal-fired power plants (2x100 MW) due to lack of interest. 

PLN director Bambang Praptono told reporters yesterday that the project attracted only two bidders, fell short of minimum requirement of three bidders. 

PLN invited bids for Bali Timur, an IPP, in March. Construction of the power plant will cost around US$200 million. PLN initially expected the power plant will commence in 2013. But with the rebid, commercial operation will be delayed significantly. PLN plans to rebid the project this month.

PLN also plans to rebid coal-fired power plant projects in Papua and Maluku under the 10,000 MW program. Papua will have 2x7 MW capacity, while Maluku with 2x15 MW. These projects are part of 35 power plants planned under the 10,000 MW program.

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Areva-Medco Euro120 million PLN contract

The consortium formed by Areva's Transmission and Distribution division and PT Multifabrindo Gemilang, a subsidiary of Medco Group, has been awarded 120 million Euro contract by PT Perusahaan Listrik Negara (PLN), the state-owned power utility company.

Through this contract, Areva-Medco will modernize the Indonesian network in line with the 10,000 MW program launched in 2006. This turnkey contract includes delivery of several high voltage substations as well as underground electrical cables, in order to distribute power to the main Java cities (Jakarta, Bandung and Surabaya).

Multifabrindo is Medco's subsidiary in construction and fabrication. Established in 1983, the company operates production facility over 3 hectares of land in Krakatau Industrial Estate, Cilegon, Banten province.

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PLN director detained

Haryadi Sadono, non-active director for Java Bali Area at PT Perusahaan Listrik Negara (PLN), has been detained by Corruption Eradication Commission (KPK) for his role in an alleged corruption in the customer management system (CMS) project.

Sadono, former general manager for East Java area of PLN, is accused of corruption in the project. Alamsyah Hanafiah, Sadono's lawyer, dismissed the allegation saying "Sadono only continued the policy from previous officer in charge."

The CMS contract, according to Hanafiah, was a product of the previous director, Fahmi Mochtar, who is currently CEO of PLN. "It is true that Sadono signed the bills. But the direct appointment is regulated by board decree signed by Edi Widiono (former PLN CEO)."

KPK investigates corruption in the direct appointment (without competitive bidding) of CMS supplier. The State loss is predicted at Rp80 billion or US$8 million. 

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Bimantara divests Trans Javagas Pipeline

PT Bimantara Citra Tbk has divested all its shares in PT Trans Javagas Pipeline (TJP) to PT Kapital Usaha Sempurna, an unknown entity at undisclosed price.

TJP was established by Bimantara (49%), Tranaco Utama (28%), Adhiraksa Tama (5%), Pertamina Saving & Investment (10%), Bank Mandiri Pension Fund (3%), and PLN Pension Fund (5%).
TJP built the controversial 430 km gas pipeline in 1992 with USD440 million investment as a BOT project. Under the contract with Pertamina, the pipeline should be transfered to Pertamina by 2014.

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SBY vs JK in the brawl over SOEs

Below is the list of brawls between SBY & JK over important issues at state-owned enterprises, including the management selection (member of the board of directors plus commissioners). It's almost similar with their competition in overseas trips (state visits). It's everywhere! Anybody has the original version of SBY & JK memorandum of understanding on how they would share the power when they decided to join forces in 2004 election?

The recent 'mini' reshuffle at the state-owned oil and gas company PT Pertamina could well explain the brawl. "It's clear that the former chairman of board of commissioner Martiono Hadianto couldn't get along with board of directors. Internally, we could sense that," one Pertamina executive told me this morning.
"The replacement is not merely a management issue, it's a political issue. Everybody knows Martiono was seen as VP's man, while his successor has close relationship with the president," said one executive at SOE who happens to be proposed by MSOE Sugiharto as commissioner at Pertamina but failed to get approval from The Final Evaluation Team (TPA, which selects executives for SOEs).
"Now the balance at Pertamina is two VP's men and two president's men, another one represents SOE Ministry who happens to be close confidante of Sugiharto," executive at the MSOE said.
A week before that, major shakeup occured at another giant SOE, PT Perusahaan Gas Negara (PGN) Tbk. This time, Sutikno named as the new CEO, replacing WMP Simanjuntak (appointed president commissioner).
"Some says Sutikno got the position thanks to strong lobby from PAN's chairman Sutrisno Bachir. But don't expect they'll confirm that. Sutikno is known for his close relationship with Amien Rais, key patron leader of PAN. So, this is a political bargaining as well," another SOE executive said.
But where is the brawl?
"Actually, VP proposed other candidate for PGN but TPA picked Sutikno. As a result, there is on-going battle for other posts still vacant," the executive said.
The ugliest brawl is actually at PT Tambang Batubara Bukit Asam Tbk, the state-owned coal producer. TPA has yet to decide the executives and leaving the company in the hands of board of commissioners for almost one month now.
Similar situations have been emerged at other giant SOEs like PT Telkom Tbk and PT PLN. Look at how the board of commissioner of Telkom led by Tanri Abeng (key ally of VP) sent a letter to Sugiharto in late August asking for Arwin's replacement.

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10,000 MW Transmission headache for PLN

The ambitious and looks-good 10,000 MW power generating project would likely worsen further state-owned electricity PT PLN's long-term financial capability as the company is yet to anticipate the transmission and distribution parts.

It took 15 years for PLN to build transmission & distribution network for 10,000 MW. Even for the best case scenario, it would take a decade or so to absorb the additional 10,000 MW. The problem, if all of these projects would be accomplished as scheduled (before 2010), PLN is tied to pay no matter PLN actually takes the power produced or not.
Even a three-year time-lag would cost PLN a lot. For power investors, as long as they have the take-or-pay clause with PLN, they would be secured. "That's gonna be a mess for PLN," one internal source at the company said.
By law, only PLN is allowed to operate transmission and distribution of electricity in the country. "I just can't understand why nobody cares about transmission. This is a huge challenge, more difficult to implement than build up 10,000 MW of power generating units. Sometimes you need more than two years only to accomplish land acquisitions. Not to mention the environmental and social struggles along the way," said one observer.
Even at PLN, there are several projects heavily delayed even though the funding is available already
He sensed massive rent-seeking in the 10,000 MW for political purpose, especially the 2009 presidential election. "The fees could go up to hundreds of million dollars," he said.

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Muara Enim power project: Chicken-and-egg situation

Reporters from major newspapers covering president Susilo Bambang Yudhoyono's visit to Shanghai, China wrote that China Huadian has eventually entered into a JV agreement with Indonesian partners to build the US$2.1 billion coal-fired power plant in Muara Enim, South Sumatra. A significant step forward, but the project is still in a chicken-and-egg situation.

Why? Because the 2,400 MW power plant would only sensible to be built if state-owned electricity PT Perusahaan Listrik Negara (PLN) also start to install Sumatra-Java power grid. So far, we never heard of PLN's plan.
Actually, early this month, director general for electricity, J Purwono, rejected US investor's plan to build 1,200 MW coal-fired power plant in Musi Rawas, South Sumatra arguing it's too big-too dangerous. The investor, AES Asia & Middle East would work with Japan's Sojitz and local partner, to build the power plant.
Mr Purwono was quoted by Detik.com saying Sumatra is not suitable for power plants with generating capacity of more than 600 MW. "Sumatra only good for 100-200 MW capacity, " he said. (Strange if we consider the regular blackouts in the island)
I would say the real reason behind the rejection is not the size of the power plants, but the availability of reliable power grid linking Sumatra and Java. By law, only PLN is allowed to operate electricity transmission & distribution in the country.

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Workers union urge SBY to kick out Sugiharto

State-Ownes Enterprise Workers Union Federation (FSP-BUMN)urge president SBY to kick out Minister Sugiharto for poor performance, Detik.com reported. This would heat-up the internal conflict at the ministry, already divided with competing political groups/motives.

FSP-BUMN said the conclusion was made based on a survey with 10,000 SOE workers as respondents. Go to detik.com story for a complete report.
FSP-BUMN is in legal battle with Sugiharto's camp after Lendo Novo, one of his right-hand men, filed lawsuit against the organization which claimed to have 8 million supporters for defamation. Lendo filed the lawsuit on FSP-BUMN's statement that Lendo's ad hoc team to investigate corruption at SOEs have squeezed BODs and have been selective in eradicating corruption at SOEs.
At the same time, some groups reported MSOE's secretary M. Said Didu for alleged corruption. Didu's supporters consider this move as part of Sugiharto's camp campaign to kick Didu out of the ministry.
In another not-so-unrelated development, yesterday, members of Geram (Anti-Corruption Student Activists Movement) three rotten eggs to Hendarman Supandji, deputy attorney general for special crime. Geram mad at Supandji because he was believed to be the one who set free Eddie Widiono, state-owned electricity company PLN CEO. Widiono, detained for few months, was in a meeting with VP Jusuf Kalla at PLN's headquarter discussing 'crash program' on development of 10,000 MW power plants when Geram throwing the rotten eggs to Supandji.
Supandji himself is under the spotlight following the accusation of Rusdi Tahir, former Jakarta Attorney Chief, that the former regularly intervene the prosecution of corruption cases.

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The Richest Indonesians & The Ironies

What a coincidence! Out there, Dow Jones quoted Forbes Asia's rich list, naming Sukanto Tanoto (owner of Raja Garuda Mas/RGM) as its Indonesia richest. At home, newspapers quoted SOE Minister Sugiharto pledge his support for state bank PT Bank Mandiri Tbk to take legal action toward recalcitrant debtors. Mandiri had named RGM as one of the debtors with no good faith.

While it's difficult to verify the exact figures, Sukanto's wealth according to Forbes reached US$2.8 billion, well above Putera Sampoerna (2.1), Eka Tjipta Widjaja (2), Rahman Halim (1.8) or R. Budi Hartono (1.4) and Aburizal Bakrie (1.2). In the previous list, Forbes named Halim as Indonesia's wealthiest while Sukanto was not even in the top five list. Wondering how the Forbes list has changed so significantly in the last few months.
Detik.com reported Sukanto is still in the police's fugitive list. But I'm not sure whether he is listed there still.
It's true that Sukanto once named a fugitive. His name also linked closely with Unibank which was closed down in 2001 but none held responsible for third party liabilities in the bank. The case isn't closed yet.
Sukanto's wealth mainly derived from palm oil business. He has pulp & paper empire, and recently oil and gas as well.
Surprisingly, no Sjamsul Nursalim in the top 10 list. Riady family, Tommy Winata, and Mum'in Ali Gunawan are out of top 10 as well. Riady family is partnering with Forbes for Indonesian edition, scheduled early next year.
Like it or not, agree or disagree, Forbes list could help Indonesia's tax officers chasing their tax payments or Bank Mandiri's bargaining position on bad loans. The list also useful for politicians, regent, governor candidates, or hopeful president candidates.
If you follow years of Forbes’ rich list, there is no significant change on the names of Indonesian richest. The difference is only on the amount of wealth & the rankings. The wealthy Indonesians could be categorized in several groups based on how they got their fortunes.
First, cigarette groups. We have Sampoerna family (even though they sold out the cigarette business to Phillip Morris), Wonowijoyo (Gudang Garam), Hartono (Djarum), and Peter Sondakh (Bentoel).
Second, forestry & plantation groups. We have Eka Tjipta Wijaya family (Sinar Mas Group), Sukanto Tanoto (Raja Garuda Mas), & Prajogo Pangestu (Barito).
Third, consumer goods. We have Salim and Wings Group.
Fourth, energy & engineering groups. We have Bakrie family, Panigoro (Medco), Kris Wiluan (Citra).
Fifth, property group. In this group we have Tan Kian (Dua Mutiara), Haliman Trihatma (Podomoro), Tommy Winata-Sugianto Kusuma (Artha Graha), Riady Family (Lippo).
Sixth, manufacturing. In this group we have Nursalim (Gajah Tunggal) for example.
So, mainly they got the fortunes from Indonesia’s rich & cheap resources (natural & human).
While most of these groups have expanded overseas (mainly China, India, or Brazil), Indonesian operations are still their main source of wealth. Most of these conglomerates were hurt by financial crisis, with the exception of cigarette groups.
But they have recovered in the last few years, thanks to the generosity of Indonesian people, the taxpayers. The state bailed out their bad debts. Some surrendered assets, but others managed to escape the financial responsibility easily.
Salim Group, for example, surrendered assets in 107 companies to pay around Rp56 trillion (US$6 billion) debt following the turmoil at Bank Central Asia (BCA). Government sold almost all the pledged assets with recovery rate of around 35%. Nursalim also did the same to pay his Rp28 trillion (US$3 billion) debt, with lower recovery rate.
Government also spent almost US$2 billion to bail out Bank International Indonesia (previously owned by Eka Tjipta’s Sinar Mas, currently controlled by Temasek).
That’s why there is almost no significant change in names listed in Forbes, the latest edition and in 1990s. The fact that Sukanto & Eka Tjipta are listed as number one and third in the ranking sparked criticism about how they created the wealth.
Both Sukanto & Eka Tjipta have strong pulp/paper & plantation (mainly crude palm oil) businesses through APRIL (RGM) Holdings & Asia Pulp & Paper (APP) respectively. Both groups have been the subject of continues allegation of environmental groups over massive deforestation in Sumatra Island.
WWF report few months ago said that APRIL and Asia Pulp & Paper (APP), the Indonesian paper producers, are accelerating the deforestation of Sumatra's jungles in spite of a bid to portray themselves as green.
According to the report, APP has been responsible for about 80,000 hectares of natural forest loss every year, equivalent to roughly one-half of the Indonesia province of Riau's annual forest loss since 2002. As of 2005, the company controlled nearly one-fifth, or 520,000 hectares, of the natural forests left on Riau's mainland. All these forests are under threat, as are any additional forests that APP acquires in its quest to fill its wood supply gap and expand pulp production.
WWF didn't publish the same press release on APRIL. But WWF Monitoring Brief June 2006 elaborated the organization's analysis on APRIL's activities.
Jikalahari (Riau NGO alliance) investigators have found evidence that APRIL's mills accepted wood from legally questionable third party source as late as May 2006. WWF admitted in the report that it calls APRIL to stop sourcing timber from this area until completion of the government legal verification process.
One NGO leader wrote cynically in Indonesian media recently that if you want to be rich, do the forestry business in Indonesia like Sukanto & Eka Tjipta. Other names listed in the Forbes report also have been regularly accused of various illegal practices such as fraud on reforestation funds or involvement in drugs & narcotics trading, gambling operation, or fishy deals with government and the military. But none of them convicted or worse various interest groups make huge chunk of money from the allegations on these richest men.

/Named a Suspect/
Apart of environmental concerns, the Forbes report has also been responded by Indonesia’s largest lender (by asset), Bank Mandiri, which happens to be the largest lender to Sukanto’s RGM. The bank has, several times, classified RGM as the debtor without good faith in settlement of almost US$500 million debts. Mandiri demands an increase in debt installment following the huge jump in pulp prices worldwide.
The day Forbes announced the rich-list, Indonesian minister for state-owned enterprises (Mandiri’s shareholder) pledged his support for Mandiri’s plan to take legal action against recalcitrant debtors, especially RGM. RGM denied all the charges arguing it follows the debt restructuring agreed upon few years ago.
A director at Mandiri was quoted by Indonesian newspapers saying, “You may rich, but pay your debts,” responding the list.
But it’s the police who surprised many when it announced the plan to reopen the investigation on Sukanto, not for the alleged environmental crime or his debts at Mandiri, but on a suspected banking crime that almost untouched in five years.
Just days after Forbes published the list, Indonesian police announced that it has resumed the investigation on Sukanto, named a suspect in a banking crime few years ago. Police declared that the case, involving Unibank---a bank initially owned/controlled by Sukanto and his wife Tinah Bingei, has been reopened after five years of almost no significant progress in investigation despite the fact that Sukanto had been named a suspect.
Unibank was closed down in 2001 leaving the state paying all third party liabilities (Rp3.9 trillion, almost US$400 million) with no shareholders held responsible. Sukanto was named a suspect on irregularities of export L/C worth US$230 million.
"Based on a meeting between Police Chief and Attorney General in August 2006, Sukanto's case has to be reopened and his status is still as suspect. The case is being handled by police team for corruption crime (Tipikor)," Paulus Purwoko, chief of public relations division at National Police Headquarter as reported by Indonesian media.
The sudden announcement failed to surprise the media at the time of eroding trust on the country’s campaign to fight corruption. Many raised the question, would the police be serious this time? Why the police reopen the case after so long? Could this be just part of ‘political’ game?
"Whatever the results might be, the reopening of the case has made Sukanto, well-known for his generosity overseas, shivering," a journalist from respected magazine commented the move. So far, police has not confirmed yet on when they would summon Sukanto for investigation.
The fellow journalist mentioned about Singapore-INSEAD's Tanoto Library or Carnegie Mellon's Tanoto Professorship. The owner of Raja Garuda Mas (RGM) also established Tanoto Foundation, which provide scholarships.
It’s not about his donations that make people doubt the investigation, but mainly the power politics in the country’s corrupt-legal system. Police might finalize the investigation, but state prosecutors may drop the case like what’s happened with the recent corruption allegation on Eddie Widiono (state-owned electricity company PLN).
Other intriguing issue is the unavailability of legal cooperation between Indonesia and Singapore. While Sukanto normally come to Indonesia, he stays in Singapore. “The problem, we have no bilateral agreement on this,” sighed the deputy attorney general Basrief Arief, who is also the Chief of Corruptors Hunting Team.
Besides, the five-year time lag since the Unibank’s closure in October 2001 is critical especially when it comes to witnesses. That’s why Attorney General’s Office said they would start the investigation all over again. This is clearly a big test for the country’s tattered image on corruption eradication campaign. Without serious efforts to end bad governance in Indonesian business, we can’t expect a cleaner sheet in the future rich lists.

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Lapindo Brantas spillover Energy-Bumi merger

Minister for environmental affairs Rachmat Witoelar threathened to terminate the operation of Lapindo Brantas in East Java for its failure to apply prudent operating measures that led to massive pollution from an East Java gas well.

Blame games at play, as usual. Lapindo's shareholder PT Medco E & P Brantas, a unit of the listed PT Medco Energi Internasional Tbk, said in a letter to Lapindo that it had reminded the firm on May 18 to set casing at a depth of 8,500 feet, as agreed in the drilling program, The Jakarta Post wrote today.
Lapindo Brantas Inc is a subsidiary of listed PT Energi Mega Persada Tbk (closely linked to Bakrie Family). This company is the designated operator of the Brantas PSC and it owns a 50% participating interest. Other shareholders at Brantas PSC are Medco (32%) and Australian Santos (18%).
Having purchased its participating interest in the mid-1990's, EMP built the Brantas PSC to be the single largest supplier of gas to the East Java PGN distribution network by 2004 from the Wunut Field.
According to Energi's annual report 2005, last year Brantas PSC produced average of 51 MMSCFD of natural gas and 14 barrel oil per day, almost half of Energi's total gas production.
Brantas PSC has up to 7 oil and gas prospects with contingent resources of up to 66 bcf under a contract mature in 2020. With prospective oil reserves of 244 million barrel and 1.35 BCF of natural gas, Brantas PSC is one of EMP's important source of income.
Oil production from the discovery in Tanggulangin field at Brantas PSC is expected to reach over 3,000 bopd by 2007.
With such significance, the question is whether Witoelar is serious enough to close down Lapindo Brantas operation. But as quoted by The Jakarta Post, Witoelar said his ministry has no authority to order Lapindo to halt its operations, asides from giving a recommendation to do so to the Energy and Mineral Resources Ministry and the Oil and Gas Regulatory Body (BP Migas) which issued the exploration license.
Closing down the company's operation may create another problem, gas scarcity for electricity generating company PLN. Punishments should be strong enough to push this company implement stringent measures in its future operation.
Whatever the government decision might be, the catastrophe potentially will influence the planned merger of Energi with PT Bumi Resources Tbk. The rehabilitation might take few months and not to mention potential litigation toward the company.

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Just outsmart Berkeley Mafia!

A group of economists appeared in a seminar titled 40 Years of Mafia Berkeley vs Alternative Ideas of Indonesia's economic development, yesterday. They're former chief economic minister Rizal Ramli (under Abdurrahman Wahid administration), Kwik Kian Gie (former chief economic minister under Wahid, replaced by Ramli), Ichsanuddin Noorsy, Revrisond Baswir, and Sri Edi Swasono (son-in-law of first Vice President Mohammad Hatta). Guest speaker was Jeffrey Winters (Northwestern University).

It was an unbalanced seminar as none of what they called Mafia Berkeley delivered arguments, no exchange of arguments actually, it's a kind of monologue of ideas, it's like bad idea vs good idea. That was not an academic exercise of thoughts. The speakers believe the alternative ideas they delivered are the only public goods. So that's a seminar with so many personal issues at stakes.
The speakers even failed to explain or acknowledged what they did and didn't while they have power in their hands to drive the economic policies into what they believe the right way and change the course of the nation.
Nor did they explain what's wrong or right during BJ Habibie's strong influence in the economy of the early 1990s. So don't expect them explaining what's right and wrong during the early years of Berkeley Mafia.
How we explain the massive debt settlement of 1998-2001 during which the government's domestic debt jumped to Rp700 trillion (US$80 billion) to bailout corporate debts of the like Texmaco Group's Rp30 trillion, Salim's Rp60 trillion, Sjamsul Nursalim's Rp28 trillion, or Sinar Mas's Rp14 trillion?
It were Soeharto's last year, Habibie, Wahid and Megawati administration's economic team who endorsed the debt settlement through agreements like the Master of Settlement and Acquisition Agreement (MSAA), MRNIA, or Debt Acknowledgement Acts (APU). How we explain the problems at state-owned enterprises like Habibie's aircraft company PT IPTN (now Dirgantara Indonesia), Garuda Indonesia, PLN, Pertamina and so forth?
I believe the Mafia Berkeley had committed some wrongdoings, just like the other mafias of Habibie's, Ginandjar's, Rizal Ramli's or Kwik Kian Gie's.
Look at this. Rizal Ramli and Kwik Kian Gie as the coordinating minister for the economy during Wahid administration had the chance to fix the lousy debt settlements with Salim, Nursalim, or even Sinivasan's Texmaco. But they were hopeless, not because of the Berkeley Mafia, but simply because of the complicated and fluid political situation aftermath of the 1998 reform.
I believe in one thing...when it comes to liberalization, globalization, privatization...they're all political decisions, not just economic models. There are a lot of aspects of the society at play. Simply blaming the mafi is just like you had a headache in the morning and keep blaming the traffic jam on your way to office for your bad day.
What's amazing is the acknowledgement of this alternative group of how powerful the Berkeley Mafia so it could survive almost 40 years and still in the driving seat of the economy even though none of them hold official position in the cabinet. I must say this Mafia Berkeley is so smart to control this big country four decades so far and may be more.
Other mafia groups might have to learn of how Mafia Berkeley keep its power. An old advise, if you really want to beat the members of this mafia, outsmart them all! All you have to do is to convince all the stakeholders of this nation to get their full attention on your alternative ideas. People are smart enough to make decision, they could analyze what's wrong and right with Berkeley Mafia and what's wrong or right with your ideas! Don't get mad, get even!

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Police detained Widiono, finally!

Police finally detained Eddie Widiono, president director of state-owned electricity company PT Perusahaan Listrik Negara (PLN) for an alledged corruption on a power plant project. Police detained Widiono on Wednesday night after series of investigations.
Read my previous posts for background:
1) Widiono named a suspect
2) Electricity shock on Widiono
Government was trying to keep Widiono at the helm of PLN. But as he starts a new life today, I'm sure government can't keep his job anymore.

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Widiono finally named a suspect, gov't keep him in the job!

Eddie Widiono Suwondho, president director of state-owned electricity monopoly PT Perusahaan Listrik Negara (PLN) has been named a suspect in a corruption case.
After months of speculation, police chief Sutanto announced yesterday that Widiono named a suspect with allegation of his involvement in a corruption case being investigated over the cost mark up of a power plant project in South Sumatra. Two PLN directors had previously named suspect in the case.
Widiono is considered a big test for this administration in its major anti-corruption drive mainly because of his strong military family background. His father was former military commander of East Java, while his sister was allegedly involved in military equipment supply during the last years of Soeharto regime.
Widiono has been in PLN CEO since early 2001 and it's not clear who will replace him. But it seems that government is fully support Widiono. SOE Minister Sugiharto stated yesterday that government will not replace Widiono until the court decides that he did involved in the corruption scandal. Sugiharto's stance is completely different with the one he made when ECW Neloe (that time CEO of Bank Mandiri) was named a suspect in a corruption allegation. Neloe was immediately replaced. Neloe was also detained, while Widiono is a free man until now. Court released Neloe two months ago.

Read my previous article for background at:
http://yosef-ardi.blogspot.com/2006/02/electricity-shock-on-widiono-sby.html

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Kick-off: Six power plant projects

State-owned electricity monopolist PT Perusahaan Listrik Negara (PLN) has started to invite expressions of interest for prequalification of six independent power plant projects in Indonesia with combined generating capacity of 2,270 MW.

Those projects are:

1) Northern Seaside, Central Java: 2 x 600 MW, coal fired steam PP (completion date 2011).

2) Pasuruan, East Java: 1 x 500 MW, combined cycle (2010)

3) Eastern Seaside, East Kalimantan: 2 x 60 MW, coal fired steam PP (2010)

4) Northern Seaside, North Sulawesi: 2 x 25 MW, coal fired steam PP (2010)

5) Eastern Seaside, North Sumatra: 2 x 100 MW, coal fired steam PP (2010)

6) Northern Seaside, Bali: 2 x 100 MW, coal fired steam PP (2010)

As the monopolist of electricity distribution, PLN intends to purchase electricity capacity and associated energy generated by the above mentioned plants. The 150 kV or 500 kV associated transmission lines and substations shall be built by the developer and transferred to PLN as a special facility.

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The brawl over PLN leadership

Despite his strong relation with president Susilo Bambang Yudhoyono and the army, some believes that Eddie Widiono Suwondho is counting his days as the chief executive officer (CEO) of PT Perusahaan Listrik Negara, the state-owned electricity company.

Rakyat Merdeka run a headline story today quoting some policians that Golkar Party is trying to promote its cadre as the new CEO for the ailing company. Candidates mentioned in the article are Golkar politician Agusman Effendi and the director general for electricity at the energy department Luluk Sumiarso. Other names are Ady Satria (former PLN CEO), Rahardjo Muharar (director at PLN), and Parno Isworo (PLN's finance director). Government is under pressure to replace PLN's board of director, especially Eddie Widiono.

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East Kalimantan-Java gas pipeline: The Five Bidders

The Upstream Oil and Gas Regulatory Body (BPH Migas) announced five bidders for the giant 1.219 km gas pipeline project connecting East Kalimantan and Java Island yesterday. Two state-owned enterprises (PT Perusahaan Gas Negara Tbk and PT Barata Indonesia) and three private companies (PT Bakrie & Brothers Tbk, PT Bumi Karsa Lini Nusa, and PT Alpha Kharisma).

PT Perusahaan Gas Negara (PGN) Tbk would establish a consortium of companies including state-owned electricity company PT Perusahaan Listrik Negara (PLN), state-owned fertilizer company PT Pupuk Sriwijaya (Pusri), and two engineering companies PT Inti Karya Persada Teknik and PT Tripatra Engineers & Constructors.

Except PT Bakrie & Brothers who is clearly linked to Bakrie Family, no detail information on PT Bumi Karsa Lini Nusa and PT Alpha Kharisma. I got zero results from googling on these companies. Bumi Karsa without two words Lini Nusa is linked to VP Jusuf Kalla. But Bumi Karsa Lini Nusa is clearly a newly registered company and may be nothing to do with Bumi Karsa, but that could be a possibility.

Alpha Kharisma is also a new company, most likely.

On PGN's consortium, PT Inti Karya Persada Teknik (IKPT) was owned by Nusamba Group (Sigit Harjojudanto, Dakab Foundation, and Dharmais Foundation---all of them are related to former president Soeharto).

Late last year, Soeharto's golf buddy Mohammad 'Bob' Hasan filed a lawsuit against IKPT shareholders and asked them to return 45% of shares owned by PT Wijaya Karya, PT Parama Matra Widya, PT Jasa Ferrie Pratama, PT Grada Matra Tiara, and Workers Cooperative of IKPT.

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