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AGO probes power plant graft
The Attorney General's Office (AGO) has named two businessmen as suspects in the alleged fraud of Rp 69 billion (US$5
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The Attorney General's Office (AGO) has named two businessmen as suspects in the alleged fraud of Rp 69 billion (US$5.75 million) from a fund allocated for a coal-fired power plant project in Sampit, Central Kalimantan.
Assistant attorney general for special crimes Marwan Effendy said the two suspects were Fahri Ahmad, PT Karya Putra Powerin director and PT Mahesa director Bramantyo.
"The two suspects allegedly swindled Rp 69 billion from a loan they acquired from Bank Mandiri for the construction of the plant," he said in Jakarta on Friday.
According to Marwan, the 2x7 megawatt power plant project began after state-owned electricity company PT PLN signed a contract with Karya Putra Powerin in January 2004. Four months later, the company borrowed Rp 69 billion from Bank Mandiri to finance the project and began work with another company, PT Mahesa.
"However, the project has been frozen since 2006 when only 20 percent of the plant's construction had been completed," Marwan said.
He said the AGO had revealed that Karya Putra Powerin was unqualified to complete the project.
"They received the loan without the capability to carry out the project. So, they asked PT Mahesa for assistance. Even then the project could not be completed," Marwan said.
The Central Kalimantan administration said earlier that it expected the Sampit coal-fired to have been completed by early 2008 and that it would be providing electricity to thousands of homes in the province's isolated villages.
The Sampit operation is among 12 projects currently being carried out by PLN and private companies outside Java. The projects are scheduled to be operational by 2009 and 2010.
Graft scandals have revolved around PLN power plant projects in the past, incluing one in Borang, South Sumatra, which has implicated former PLN president director Eddie Widiono.
The AGO accused Eddie of illegally inflating the prices of three generators -- two in Borang and one in Muara Tawar in Bekasi, West Java -- acquired for the plants in 2004, and for carrying out irregular contract tendering. These incidents have cost the state Rp 122 billion in financial losses. The AGO interrogated Eddie earlier last year, but had not detained him until today.
Eddie was also under investigation by the AGO for his involvement in another graft case dating back to 2003. The investigation involved the distribution of irregular bonuses to Eddie's staff valued at around Rp 4.2 billion.
