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Fri, May 25, 2012
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AGO Questions Merpati Head Over Chinese Plane Purchase
Heru Andriyanto | May 25, 2011

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The Attorney General’s Office questioned the president director of embattled state-owned airline Merpati Nusantara Airlines on Wednesday as part of a preliminary investigation into alleged corruption involved in the purchase of 15 Chinese-made planes, one of which crashed in Papua with the loss of 25 lives.

Andhi Nirwanto, the deputy attorney general for special crimes, including corruption, confirmed the AGO was investigating Merpati’s purchase of 15 turboprop MA60s manufactured by the Xi’an Aircraft Industrial Corporation.

Andhi said it was still too early to say which officials other than Merpati president director Sardjono Jhoni Tjitrokusumo would be summoned.

He said the AGO would be working closely with the Corruption Eradication Commission during the investigation.

He declined, however, to say whether the probe focused on the controversial tender process.

“The substance of the investigation is in the hands of the investigators,” he said.

Sardjono, speaking after the questioning, said he had been questioned about claims by former Vice President Jusuf Kalla that he opposed the purchase in the first place due to safety concerns.

 “I explained that according to the documents in our hands, there was no opposition from Jusuf Kalla,” Sardjono said. “As for myself, I never communicated directly with him.”

He said prosecutors had summoned him due to the increasing number of “reports out there,” in an apparent reference to the widespread allegations of corruption.

“They asked about the price and my answer was that to the best of our knowledge, the price was reasonable,” he said.

He said if anything was wrong with the purchase, “I am the one who will take responsibility.”

Earlier this month, President Susilo Bambang Yudhoyono demanded an “explanation” for the controversial purchase.

Under the 2006 contract between Merpati and the plane maker, each aircraft was priced at $14.1 million but it was later discovered that airlines in the Philippines, Ghana and Nepal had bought the same type of aircraft for only $11 million each.

The deal was financed with 1.8 billion yuan ($227 million) from the China Import Export Bank, repayable over 15 years with annual interest of 2.5 percent. Merpati took delivery of the first two planes in mid-2007 but after finding cracks in the fastener of the vertical stabilizer and facing worsening financial difficulties, it considered canceling the purchase.

The move reportedly prompted China to retaliate by halting a loan for an electricity development project in Indonesia. In response, Trade Minister Mari Elka Pangestu was sent to China to renegotiate the plane purchase agreement.

Andhi, asked directly if Pangestu would be summoned as part of the investigation said, “we are not there yet.”

In addition to the high price and mechanical flaws, the deal was also dogged by concerns that the MA-60s were not certified by the US Federal Aviation Administration, whose guidelines, though not mandatory in Indonesia, are nonetheless the de facto standard for airlines.

Merpati, meanwhile, is still struggling with trillions of rupiah in debt and disputes with its workers. It underwent a restructuring in 2008 and 2009, which was when the issue of the high price paid for the MA-60s was first raised by auditors.




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