Indonesian Corruption Eradication Commission (CEC) continues the allegations of corruption cases carried out between State-Owned Enterprises (SOEs) - Photo: The Ministry

JAKARTA (TheInsiderStories) – Indonesian Corruption Eradication Commission (CEC) continues the allegations of corruption cases carried out between State-Owned Enterprises SOEs), namely PT Angkasa Pura II and PT Industri Telekomunikasi Indonesia. The anti-graft commission has named Industri Telekomunikasi’ managing director Darman Mappangara as a suspect.

“After finding sufficient preliminary evidence, the CEC conducted a new investigation on Darman Mappangara,” CEC’ spokesman Febri Diansyah told a press conference in Jakarta on Wednesday (10/02).

The case began when the anti-graft commission ensnared two suspects, namely Andra Agussalam as finance director of Angkasa Pura II and Taswin Nur, Industri Telekomunikasi‘ officials.

It said Agussalam allegedly received bribes related to the procurement project baggage handling system (BHS) at 6 airports managed by Angkasa Pura II. The CEC said he received US$96,700 in exchange for his actions to ‘escort’ the BHS project to be carried out by Industri Telekomunikasi.

The project is planned to be operated by Angkasa Pura II’ subsidiary, PT Angkasa Pura Propertindo (APP). The anti-graft commission said the value of the project was approximate Rp86 billion ($6.09 million).

Agussalam was charged with Article 5 paragraph 1 letter a or b or Article 13 of Law Number 31 of 1999 as amended by Law Number 20 of 2001 concerning Eradication of Corruption in conjunction with Article 55 paragraph (1) 1 st Criminal Code.

The bribery case in SOEs shows the failure of Rini Sumarno‘s leadership as a minister. “Favorite” minister of President Joko Widodo continues to be in the spotlight because of the controversial policies and many peoples ask the president to dismiss her.

Recently, Soemarno returned to the spotlight when the CEO of state-owned power producer PT Perusahaan Listrik Negara (PLN), Sofyan Basir, was named a suspect by the CEC for his involvement in the Riau power plant project.

Under her’ command, SOEs, even though they lacked liquidity, seemed to be forced to make debt an instrument of forced infrastructure projects from state-owned enterprises. This may be due to the limited ceiling of the Government debt, while private companies and foreign investors who are expected to help finance infrastructure are not as expected.

According to the Ministry data, the debt of SOEs without third-party funds throughout 2018 reached Rp2,394 trillion. That number jumped 47.5 percent compared to 2017 realization which amounted to Rp1,623 trillion.

If calculated by entering third-party funds, in total, the state company debt was recorded at Rp5,613 trillion or an increase of 16.2 percent compared to the previous year’s realization of RP4,830 trillion.

Many observers consider SOEs’ debt to be very worrying. Especially in the Rupiah current condition, State finances are in dangerous conditions. Non-financial SOEs’ debts were recorded 59 percent in foreign currencies and 53 percent held by foreigners. The burden of debt repayments and interest will weigh heavily on the company

According to the economist of the Institute for Development of Economics Finance (Indef) Faisal Basri, the mode that can be implemented by SOEs is to provide debt to failed projects. The failed project must still pay installments and interest according to the procedure even if the project does not produce.

The process of paying installments is usually held overseas and usually records smooth payments. Because it is recorded smoothly, the SOEs banks continue to top up or give credit again.

“So, money from abroad goes to the bank. The money comes from Indonesia which may be the result of corruption, they can be washed there in the form of paying installments and interest to Indonesia through the failed project,” Basri said on Monday (09/30).

Then there is another mode by which one project’s debt is defaulted, then applying for debt in the name of another project to finance the first project that is stuck.

Another mode is debt from SOEs to build office buildings owned by a minister. According to him, the building was unsold and other SOEs were asked to renovate and lease it for the next five years.

Furthermore, there is another mode of business that does not need a commissioner’s permission and does not reach the maximum lending limit. This is done by breaking up small amounts of credit under various names, he ended.

US$1=Rp14,100

Written by Lexy Nantu, Email: lexy@theinsiderstories.com