Litany of Ex-Ministers Tied to Graft-Tainted Bird Flu Vaccine Plant

By webadmin on 03:20 pm Jul 24, 2012
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Markus Junianto Sihaloho

A graft-ridden project to build an avian influenza vaccine plant implicated three health ministers and one finance minister before former Democratic Party treasurer Muhammad Nazaruddin got involved, an audit has revealed.

According to the report from the Supreme Audit Agency (BPK), the project that began in 2008 and was halted in 2011 was conceived after state pharmaceutical company Bio Farma expressed interest in producing a bird flu vaccine.

In 2006, Bio Farma sent proposals to the World Health Organization and Japanese Embassy for funding.

The Japanese Embassy, through the Japan International Cooperation Agency, rejected the proposal.

But the WHO agreed to grant $2 million that was later used by Bio Farma to transfer technology for the bird flu vaccine downstream through its production process.

The state company then sent the same proposal to the National Development Planning Agency (Bappenas) and the plan was approved by then State-Owned Enterprises Minister Sugiharto.

Bio Farma also wrote a letter to then Health Minister Siti Fadillah Supari and said the company had approached the House of Representatives’ Budget Committee to approve a grant for the project.

A meeting that discussed the revision for the 2008 state budget between the House Budget Committee and the government, which was represented by then Finance Minister Sri Mulyani Indrawati and Bank Indonesia Governor Burhanuddin Abdullah, eventually approved a Rp 200 billion ($21 million) grant for Bio Farma. To disburse the money, Finance Ministry officials held several meetings with Health Ministry officials.

Analysts say it appears likely that the alleged markups in the process started during this period, when the Health Ministry proposed a higher budget allocation.

The budget planning and disbursement involved former Sugiharto, former Bappenas head Paskah Suzetta, Sri Mulyani and three health ministers: Siti, the late Endang Rahayu Sedyaningsih and Nafsiah Mboi, the current minister.

Sugiharto, Paskah, Sri Mulyani and Siti were involved in the project during the budget disbursement in the 2008 revised state budget. The budget allocated at the time was around Rp 194 billion but only around Rp 144 billion was disbursed.

Before her term as minister ended, Siti proposed a greater budget allocation for the project that brought the figure to almost Rp 1.5 trillion from the initially estimated Rp 800 billion.

Her successor, Endang, continued the project in 2009 and lobbied the House to allocate Rp 490 billion for the project. The project was soon halted after suspicions emerged, based on the budget swelling threefold, that the project was riddled with graft.

“If it’s like that, then the scale of the alleged graft is simply unbelievable,” said Poempida Hidayatullah, member of House Commission IX, which oversees health affairs.

The Corruption Eradication Commission (KPK) began investigating the project after it was revealed that a shell company linked to Nazaruddin, who was convicted earlier this year of bid-rigging, won the contract to construct the plant.