2 oil and gas projects to be re-tendered

The government will soon re-tender the Serang (West Java) fuel depot "B" project and the Cilacap (Central Java) - Balongan (West Java) fuel piping project following alleged corruption, collusion and nepotism (locally known as KKN) in the two projects, according to the director general of oil and gas at the Ministry of Energy and Mineral Resources, Rachmat Sudibyo.

He noted that the two projects were ones of the urgent projects to be build to prevent possible future fuel scarcity in Jakarta and its surrounding area and also West Java.

"Actually, when we had fuel scarcity a few months ago, we felt the urgency to build the piping system in Java, especially the one linking Cilacap and Balongan and also fuel depots. The existing Plumpang depot (in Jakarta) has limited capacity to supply all the needs (in Greater Jakarta areas). Therefore, the Serang depot project - that was canceled because of allegations of KKN -- will be re-tendered," he said after meeting with Minister of Energy and Mineral Resources Purnomo Yusgiantoro.

The 120-kilometer Cilacap-Balongan piping project became more urgent following the facts that Balongan fuel refinery plant often stopped operation. "So, if Balongan refinery plant has troubles, the Cilacap refinery could supply fuels to Jakarta through the Cilacap-Balongan-Jakarta piping."

The government and state oil and gas company Pertamina initially awarded the Java fuel piping project to PT Triharsa Bimanusa Tungga, a company affiliated to former president Soeharto's eldest daughter Siti Hardijanti Rukmana. Trihasra was initially tasked to build the Cilacap Balongan piping line, 140-kilometer Rowuluh (west of Yogyakarta)-Semarang (Central Java) piping project and 60-kilometer Sukabumi-Padalarang (West Java) piping project.

The projects were then put on balance following allegations of grafts in the projects. And the government decided to re-tender the projects one by one.

"Our piping from Cilacap currently ends in Rowuluh, west of Yogyakarta. This piping needs to be extended to Semarang, and eventually to East Java," Rachmat said.

Meanwhile, the Serang depot "B" project was initially awarded to PT Pandan Wangi, an affiliate company of PT Panutan Selaras, which is allegedly owned by Soeharto's eldest son Sigit Hardjojudanto. And again the government scrapped Pandan Wangi of the project following allegation of grafts.

The construction of the Serang depot project will likely be continued by PT Van Der Horst Teguh Sakti, a subsidiary of PT Van Der Horst Indonesia.

Rachmat said the government sought the participation of private companies in the two projects. However, could not yet define what kind of cooperation with the private companies in the development of the two projects, whether they would use build operate transfer (BOT) or build operate owned (BOO) schemes.

"That needs to be negotiated with Pertamina," he said. (godang)