Indonesia electricity chief charged with bribery over coal-fired power plant

Coal price
  • Indonesian anti-graft investigators have charged the head of state-owned power utility PLN, Sofyan Basir, with bribery in connection to a coal-fired plant on the island of Sumatra.
  • Sofyan was responsible for awarding contracts for the $900 million Riau-1 plant, whose construction has been suspended following a raft of corruption allegations and arrests.
  • Among those already tried and convicted in the case are a government minister, a member of parliament, and a shareholder in one of the companies awarded the Riau-1 contract; Sofyan himself faces up to 20 years in prison if convicted.
  • Environmental activists have praised the anti-graft commission for pursuing the case, which they say should spur the government to move away from coal and shift toward renewable energy.

JAKARTA — Investigators in Indonesia have charged the head of the state-owned power utility with corruption in connection to a coal-fired plant being built in Sumatra.

The Corruption Eradication Commission, or KPK, alleges that Sofyan Basir, the chief executive of the electricity company PLN, took bribes in exchange for awarding contracts for the construction of the $900 million Riau-1 power plant. PLN had earlier suspended the project following multiple corruption allegations that have ensnared a government minister and a member of parliament, among others.

The project was awarded by PLN subsidiary Pembangkitan Jawa Bali (PJB), without going through a transparent bidding process, to a private consortium that includes a subsidiary of Singapore-listed energy firm BlackGold Natural Resources.

One of BlackGold’s top shareholders, Johannes Budisutrisno Kotjo, was among nine people arrested by the KPK in an anti-graft bust in July 2018. He was charged with paying a 4.8 billion rupiah ($338,000) bribe to Eni Maulani Saragih, a member of the parliamentary oversight committee for energy policy. The investigation expanded to include the minister for social affairs, Idrus Marham, at whose home the KPK sting took place. Kotjo, Eni and Idrus have since been tried and convicted, receiving sentenced of four and a half, six, and three years, respectively.

Idrus was sentenced on the morning of April 23, hours before the KPK announced it had charged Sofyan.

“[Sofyan] has been accused of accepting the same amount of money that Eni M. Saragih and Idrus Marham were given,” Saut Situmorang, a deputy chairman of the KPK, said at the press conference in Jakarta.

Sofyan faces charges that carry a prison sentence of up to 20 years and fines of up to 1 billion rupiah ($70,000). The PLN chief was in France on a work trip when the KPK made its announcement. A company spokesperson said he was due back in Indonesia before the end of the week. PLN’s general counsel, Dedeng Hidayat, said the company would cooperate with the KPK in the investigation. The Ministry of State-Owned Enterprises said separately on April 25 that Sofyan had been suspended pending the investigation.

Riau-1 is one of dozens of coal-fired power plants planned for construction throughout Indonesia as part of the government’s ambitious push to add 35,000 megawatts of power capacity to the national grid in the coming years. (The initial target date was 2019, but the government now says it may take until 2024 to get that full capacity on line.) The government, and in particular PLN, has been widely criticized for continuing to rely heavily on coal to generate electricity.

Environmental activists have praised the KPK for pursuing the Riau-1 case. “Charging [Sofyan] is a step forward in dismantling the connection between dirty coal energy and the practices of corruption by the country’s political elite and government,” Dwi Sawung, energy campaigner at the Indonesian Forum for the Environment (Walhi), said in a statement.

Walhi has called on the KPK to also target the consortium of companies involved in the case, including China Huadian Engineering Company and a BlackGold subsidiary, PT Samantaka Batubara.

“Kotjo could not have acted on his own, [he must have done it] for the company,” Dwi said.

Activists have also cited this case as a strong reason for the government to move away from coal and shift toward renewable energy generation, a sector they say is less prone to corruption. Dwi said renewable energy typically relies on the potential power capacity and demand of a region, as opposed to the coal industry, which he said was driven by corporate and personal financial incentives.

“The case for clean energy is that not only does it not emit carbon dioxide, but it’s also clean from corruption,” he said.

Source: Mongabay