Jakarta – A "procedural error" meant the government lost up to Rp 1.7 trillion (about US$180 million) in unpaid rent from the Hilton Hotel, the Attorney General's Office (AGO) was told on Wednesday.
Golkar Party legislator Mahadi Sinambela told the AGO the error meant the hotel had occupied 270 hectares of state land at the Bung Karno Sports Complex in Senayan, Central Jakarta, for years without paying the proper fees.
The AGO interdepartmental antigraft team summoned Mahadi, a former deputy chairman of Bung Karno Stadium management, to explain the irregularities found in a recent audit of government assets.
"There was an error in the procedure for the issuance of the extension of the Hilton's Building Use Permit (HGB) by the National Land Affairs Agency (BPN) because PT Indobuildco, the owner of the Hilton Hotel, did not ask permission from the State Secretariat," Mahadi told reporters after the interrogation. The use of all buildings located state land must be approved by the State Secretariat before permits or extensions can be issued by the BPN.
Mahadi said PT Indobuildco violated a 1989 presidential decree because it did not process its land management rights with the Gelora Senayan management, the group responsible for the use of state land in the compound.
Mahadi's lawyer, Junaidi Matondang, told The Jakarta Post that his client has issued notification letters to the State Secretariat on Dec. 28, 1999, and to Indobuildco on Dec. 30, 1999, stating that there were procedural errors in the use of the state land on which the Hilton property was located. The BPN issued Hilton's permit extension in 2002 without paying attention to those letters.
When asked who was to blame, Junaidi refused to answer. "Let's give the team a chance to conduct further investigations into this case," he said. The team began investigating the case on Oct. 27, last year, after the AGO received a the Supreme Audit Agency report on state assets.Tomorrow, the team will question Southeast Sulawesi Governor Ali Mazi, who was a lawyer for Indobuildco when the permit was issued.