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House defends Grand Indonesia in contract case
The House of Representatives (DPR) has called for a contract renegotiation and declared that there was no wrongdoing in the BCA Tower and Kempinski Apartment developments, despite the Supreme Audit Agency’s (BPK) report that alleged they were “unstated buildings”.
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A quiet Hotel Indonesia traffic circle is seen in this picture taken on Feb. 24. The House of Representatives (DPR) has called for a contract renegotiation and declared that there was no wrongdoing in the BCA Tower and Kempinski Apartment developments, despite a Supreme Audit Agency (BPK) report that alleged they were “unstated buildings.” (the jakarta post/Wienda Parwitasari)
Anton Hermansyah
The House of Representatives (DPR) has called for a contract renegotiation and declared that there was no wrongdoing in the BCA Tower and Kempinski Apartment developments, despite a Supreme Audit Agency (BPK) report that alleged they were “unstated buildings”.
One of conclusions that came out of a hearing between the House’s Commission VI overseeing state-owned enterprises and Hotel Indonesia Natour (HIN) was that the House recommended both parties to renegotiate the disputed clauses in the contracts.
"Despite not being stated clearly, BCA Tower was built based on compensation requested by HIN and the apartment building was part of the hotel service. The change from HGB [right to use] to HPL [right to manage] included in the 2010 revision may have been based on the Djarum Group’s request for a loan," Commission VI chairman Achmad Hafisz Tohir told thejakartapost.com on Monday.
Currently, HIN has an office on the 39th level of the BCA Tower. The Djarum Group has used the BCA Tower as collateral to get a loan from the United Overseas Bank, despite a clause in the build, operating, transfer (BOT) agreement prohibiting the use of assets as collateral.
HIN management explained that the BOT agreement with Cipta Bumi Indah (CKBI) of the Djarum Group was sealed in 2004 because of the need for funding to renovate Hotel Indonesia.
"At that time, we were still in an economic slowdown and nobody wanted to take the risk except CKBI," said HIN president director Iswandi Said.
The agreement included one hotel (Hotel Indonesia Kempinski), two shopping malls (Grand Indonesia’s West and East malls), a parking lot, etc. The apartment building and office tower were not named clearly in the agreement and the DPR regarded the "etc" as the legal basis for developing extra buildings.
While leaving the examination of the country's losses to the BPK and Attorney General's Office (AGO), Commission VI suggested HIN amend the agreement to recover the potential losses.
"We need to renegotiate both assets. We should respect the contract. It is already there and in the end the BCA Tower and Kempinski could be owned by the government. At least the country could recover this potential loss," said a Commission VI member Dody Reza Alex Noerdin. (ags)
