When the brown stuff hits the fan it flyes everywhere!

March 26, 2012

Megawati shares the blame on Sukhoi fiasco: Minister



Feeling pressured over mounting calls for an investigation into the alleged irregularities surrounding the 2011 procurement of six Russian-made Sukhoi fighter jets, President Susilo Bambang Yudhoyono has asked law enforcers to also probe his predecessor Megawati Soekarnoputri who initiated the use of Sukhoi in 2003.

While defending Yudhoyono’s decision to continue buying the jets since he entered office in 2004, Cabinet Secretary Minister Dipo Alam instead said that the procurement of the jets under Megawati’s administration had breached numerous norms and law.

“The deal was that we bought 4 Sukhoi jets using a controversial counter-trade deal where Russia received commodities, which was dominated by crude palm oil [CPO], to pay the purchase,” Dipo, who at the time of the deal was a deputy for the Coordinating Economy Minister, told reporters on Sunday.

“Yudhoyono, who was the Coordinating Political and Security Affairs Minister, did not also have many roles in the dubious deal. How could a purchase of jet fighters be made while the then State Budget did not have any allocated funds for that?”

Dipo was speaking at an impromptu press conference onboard the Garuda Indonesia’s Airbus A330 cabin during a presidential flight from Hong Kong to Seoul.

According to him, Megawati asked the State Logistics Agency (Bulog) to lend US$26 million to pay the down payment for the jet fighters.

This, according to Dipo, had been clearly against the 2003 State Budget.

“The government at that time eventually disbursed the tactical budget, which was allocated for disaster management, to repay Bulog, which was even more irregular. Had the tsunami had happened in 2003, we would not had had enough money to handle it,” Dipo said.

On Saturday, President Yudhoyono said he would not hamper any investigation into the alleged markup in the procurement of Sukhoi jet fighters provided it included the entire purchasing process dating back to before he entered office in 2004.

"I understand what happened in the past [regarding the procurement] but did not want to delve into the past.

“However, since this issue has been brought up, go ahead and investigate it in its entirety from when we first procured the jets," Yudhoyono told Indonesian journalists in Beijing before departing for Hong Kong.

In December 2011, the government proceeded to buy six Sukhoi Su-30MKKs worth US$470 million to complete the Indonesian Air Force's Sukhoi squadron.

However, lawmakers and civil society suggest that the 2011 procurement involved a markup and corrupt practices.

Lawmaker TB Hasanuddin from Megawati's Indonesian Democratic Party of Struggle (PDI-P), for example, has repeatedly questioned the government's decision to use export credit after the Russian government had offered a state credit facility, which he said would be much easier to repay.

Activists also question the alleged use of a broker in the purchase, which they claim had resulted in the ballooning prices of the jets.

They have also filed a report on the alleged corruption with the Corruption Eradication Commission (KPK) because they believed the actual cost of the procurement of the six Sukhois would be no more than $420 million.

Dipo said Hasanuddin should have known better about the early purchase of the Sukhoi since the PDI-P politician had been Megawati’s military secretary during the latter’s term in office.

Defense Minister Purnomo Yusgiantoro has denied any corrupt practices in the procurement. He also said the government did not use a broker, saying the government only dealt with the Jakarta representative of Rosoboronexport, Russia's state-owned firm appointed to export Russian-made weapons systems. (nvn)

Timeline

2003 to 2004: 2 Su-27MK2s and 2 Su-30MKs arrived in Indonesia. The purchase was made in a controversial counter trade scheme worth $192 million.

2008 to 2009: 3 Su-30MK2s delivered.

September 2010: 3 Su-27SKMs landed in Makassar, South Sulawesi. (Six Sukhois delivered from 2008 to 2010 were worth US$ 335 million)

December 2011: The government signed deal worth $470 million to buy 6 Su-30 MK2s. Two jets ordered are expected to arrive in Indonesia in April, three others in 2013 and the final jet in 2014.

(Source: The Jakarta Post)


(That is a lot of dineros mi amigos, that could have been spend in much worthier areas, like Health-Poverty-and not to forget the aged!) siK.
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The Jakarta Post, Jakarta Tue, 03/27/2012


After repeatedly denying such claims, the Defense Ministry on Monday acknowledged that it used a broker company in the controversial purchase of six Russian-made Sukhoi fighter jets.

During a hearing at the House of Representatives’ Commission I for defense, intelligence and foreign affairs, Deputy Defense Minister Sjafrie Sjamsoeddin said that PT Trimarga Rekatama was involved in the deal to provide “administrative assistance” to the sophisticated procurement process.

“We [the Defense Ministry] will make some corrections in our administration to hinder misunderstanding. I can assure you that the agent was not involved in the purchasing process. We don’t buy [the Sukhoi] from Trimarga Rekatama,” Sjafrie said.

According to the Indonesian Corruption Watch (ICW), Trimarga is owned by businessman Eng Jin Tjong, who is a family friend of President Susilo Bambang Yudhoyono.

Last December, the government proceeded with the purchase of six Sukhoi Su-30MKKs, worth US$470 million, to complete the Air Force’s Sukhoi squadron. However, critics and lawmakers claimed the price for the six jets was only $328.8 million.

The Defense Ministry claimed that the excess funding was allocated for the purchase of 12 Sukhoi engines and to finance training of 10 Indonesian pilots. But, according to lawmakers, only $84.5 million was spent for the engines and pilot training, while the remaining $56.7 million has been left unaccounted for.

Suspicion is rife over a mark up in the purchase and the involvement of a broker that has caused the prices of the Sukhoi to be more expensive than previously thought.

Since the late-1960s, the military has often used third-parties for the purchase of arms instead of dealing directly with manufacturers or official agents. The practice has somehow survived and has caused the procurement costs to be inflated by more than 30 percent of the original prices.

Numerous reports have said the brokers would normally give a cut to generals and high-ranking officials involved in the deal.

Commission I member Helmy Fauzi from the Indonesian Democratic Party of Struggle (PDI-P) and several other lawmakers questioned an advertisement by the Defense Ministry in a national newspaper that clearly mentioned Trimarga Rekatama as the agent in the Sukhoi deal.

“We have to thank the ministry for its transparency through the advertisement, but this has revealed to the public that the company was directly appointed,” Helmy said.

“I believe the government has supposedly made a profit-sharing [arrangement] with the company in the deal.”

Helmy said that if the deal was done on a government-to-government basis, the ministry should have executed the deal with Rosoboronexport, the Russian state company authorized to sell the jets. The firm has an office in Jakarta.

Commission I chairman Mahfudz Siddiq asked the ministry to review the deal by using the remaining $700 million worth of the export-loan facility provided by the Russian government for the Sukhoi purchases.

He added that a representative from Russian Embassy told him that Russia actually wanted Indonesia to use the state credit.

“The loan is cheaper than paying with direct cash from the state budget. This step should be taken immediately as it would soon expire,” he said.