Health Minister Admits Breach of Contract in Nazaruddin-Linked Bird Flu Vaccine Project

Markus Junianto Sihaloho

The government on Monday admitted that a company of graft convict Muhammad Nazaruddin, Anugrah Nusantara, has violated the terms of its contract in the provision of equipment for an avian flu vaccine factory.

“It is true [the contract violation], but I had already sought an explanation at the time [that suspicions of the contract breach were first raised]. And at the time, they [lawmakers] did not yet know how wide the scope was,” Health Minister Nafsiah Mboi told journalists before a hearing at the House of Representatives.

Nafsiah said even though it was found that the contract was violated, the vaccine plant at Airlangga University in East Java was already operating.

“Vaccines can already be produced. The chicken breeding to make the vaccine is 80 percent completed, but to step up vaccine production to meet national needs or to aid other nations, it [plant capacity] still has to be increased,” Nafsiah said.

She could not yet say when the plant would operate at full capacity, adding that it can produce 5,000 vaccines at present. Ten times that production would be needed in the event of a bird flu pandemic.

The Corruption Eradication Commission (KPK) is currently investigating the avian flu vaccine plant project. It said that although Anak Negeri, another company belonging to Nazaruddin, won the construction project, the plant was actually built by Biofarma, a state-owned vaccine producer.

Nazaruddin’s Anugrah Nusantara also won a Rp 718 billion ($76.1 million) tender for the provision of equipment for the vaccine plant. The contract was signed on Dec. 12, 2008, and stipulates that the equipment was to be supplied in full by the end of 2009, a deadline that was not met.

The Supreme Audit Agency (BPK) has audited the project and found Rp 600 billion in potential state losses.

Nafsiah also said that as she was not minister at the time, she had no knowledge of how Anak Negeri and Anugrah Nusantara won the tenders.

She said her ministry would not hinder the KPK in its investigation of the case.

BeritaSatu/JG