Tuesday, March 20, 2012

Rights watchdogs allege markup in Sukhoi jet deal

A coalition of human rights groups has filed a report with the Corruption Eradication Commission (KPK), alleging that there had been a markup in the government purchase of Sukhoi jet fighters from Russia.

“We suspect there was an illegal fee paid to the Defense Ministry,” Imparsial executive director Poengky Indarti told reporters at KPK headquarters on Tuesday.

The coalition found several indications of a markup, she said. “Those include documents that we have submitted to the KPK,” she added.

On Dec. 29, 2011, the Defense Ministry signed a contract to purchase six jet fighters from JSC Rosoboronexport, a Russian state-owned company appointed as the sole distributor of Russian-made weapon systems. According to the US$470 million contract, the first two planes ordered would be delivered in 2012, while three others would be delivered in 2013 and the remaining plane in 2014.

The coalition consists of Imparsial, the Institute for Policy Research and Advocacy (Elsam), the Institute for Defense and Peace Studies (IDSPS), Indonesia Corruption Watch (ICW), the Commission for Missing Persons and Victims of Violence (Kontras) and the Human Rights Working Group (HRWG).

Representatives of the coalition met three KPK leaders, namely Bambang Widjojanto, Busyro Muqoddas and Adnan Pandu Praja.

The coalition claims that the alleged markup resulted in about $78 million in state losses.

Adnan Topan Husodo from the ICW said that Rosoboronexport offered the same model of Sukhoi for between $60 million and $70 million in August 2011.

“The six fighters cost only around $420 million,” he said.

The activists also claimed that they had an official document stating that PT Trimarga Rekatama brokered the deal.

“It is dubious as Rosoboronexport has a representative here in Jakarta,” he said.

Previously, Defense Minister Purnomo Yusgiantoro denied that the government had used a broker.

The Russian Embassy in Jakarta has also stated that the purchase of the jets did not involve a price markup, or a third party.

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