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Jakarta Post

Natour-Grand Indonesia deal could cause state losses: BPK

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Mon, February 15, 2016   /  12:06 pm
Natour-Grand Indonesia deal could cause state losses: BPK

Potential losses: The homepage of Grand Indonesia's official site features sunset at the renowned Hotel Indonesia traffic circle, with Hotel Indonesia Kempinski in the background. The Supreme Audit Agency (BPK) has alleged a business deal between Grand Indonesia and state-owned hotel operator Hotel Indonesia Natour could lead to state losses of Rp 1.3 trillion. (courtesy of grand-indonesia.com)

The Supreme Audit Agency (BPK) has warned the government over Rp 1.3 trillion (US$96.25 million) in potential state losses relating to a cooperation between state-owned hotel operator PT Hotel Indonesia Natour (Hotel Natour) and shopping mall operator PT Grand Indonesia.

The partnership was initiated between Hotel Natour and PT Cipta Karya Bumi Indah (Cipta Karya) to develop fallow land near Hotel Indonesia through a build, operate and transfer (BOT) agreement, in which Cipta Karya acts as the BOT rights recipient from Hotel Natour.

However, the agreement was violated and may lead to state losses as a result of contract period revision, low compensation rate against income percentage and the use of right to build (HGB) certificate as a debt collateral, the BPK said in an audit report.

In the original agreement, Hotel Natour gave Cipta Karya the right to develop Hotel Natour'€™s land for 30 years (2004-2033) in exchange for Rp 355 billion in compensation, equating to 25 percent of its taxable value of property (NJOP).

But in the contract revision inked in 2010, the rights extended to 50 years with an additional compensation of only Rp 45 billion from a total of Rp 400 billion. '€œIt is not a proper amount of compensation,'€ the BPK noted, as quoted by kompas.com on Monday in Jakarta.

Grand Indonesia, as stated in the BPK'€™s report, became the new contract holder in the revised agreement and registered the HGB certificate as collateral to obtain bank loans, in contravention of the prior agreement, which contained a clause prohibiting a transfer of contract and the use of the HGB certificate as collateral.

"The use of option rights to extend the BOT contract between Hotel Natour and Grand Indonesia infringes the rule, without adequate planning basis and may lead to the opportunity loss of winning greater compensation of Rp 1.3 trillion, as a minimum," BPK stated in the resume of the audit.

The State-Owned Enterprises Ministry'€™s deputy for energy, logistics, zones and tourism, Edwin Hidayat Abdullah, admitted that there were problems in Hotel Indonesia Natour's business agreement involving Cipta Karya and Grand Indonesia.

"However, we'€™re still assessing [the problem] from several documents available. We'€™ve just received the audit report from BPK," he said.

The management of Grand Indonesia'€”which operates GI shopping mall and Hotel Indonesia Kempinski at the capital's famous Hotel Indonesia traffic circle'€”could not be reached for confirmation.

Meanwhile, Hotel Natour president director Iswandy refused to comment. (ags)(+)

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