Bayu Marhaenjati, Jakarta – Former South Sumatra governor Alex Noerdin was named a suspect on Thursday in a corruption case related to a gas purchase deal that according to prosecutors has cost the state more than $30 million.
Alex, now a House of Representatives member for the Golkar Party, was detained hours after the Attorney General's Office announced his alleged role in the case in the morning.
AGO spokesman Leonard Eben Ezer said the case stemmed from a gas supply and purchase deal involving a South Sumatra municipal company when Alex was leading the province for 10 years since 2008.
The province won the right to buy 15 million metric cubic feet (MMCF) of gas per day from the Jambi Merang field in Sumatra, which was jointly managed by state-run energy company Pertamina, Talisman Ltd, Pacific Oil and Gas Ltd.
The now-defunct Oil and Gas Regulatory Body (BP Migas), a state regulator in the industry, appointed municipal company Perusahaan Daerah Pertambangan Dan Energi (PDPDE) to manage the purchase for South Sumatra at that time.
Arguing that the municipal company had little experience in the business in addition to a lack of funding, the provincial government set up a joint venture with private company Dika Karya Lintas Nusa.
However, it turned out that PDPDE has only a 15 percent share of ownership in the joint venture, the spokesman said.
The ownership structure has allowed the private company to reap a disproportionate share of profit, while causing a massive financial loss on government's side.
Leonard said that according to the Supreme Audit Body (BPK), the joint venture has inflicted a loss of at least $30 million in revenues that should have been paid to the provincial government between 2010 and 2019.
He said then Governor Alex, 71, was instrumental in persuading BP Migas to allocate some of the gas output for the province.
"The suspect also approved the establishment of a joint venture between PDPDE and Dika Karya Lintas Nusa whose goal is to obtain a portion of gas supplies belonging to the state," Leonard said.
The former chief commissioner of the joint venture, identified as Muddai Madang, was also named suspect along with Alex.
Muddai has allegedly taken illegal payment from the joint venture, Leonard said without elaborating.
"Both suspects are detained for 20 days," he said.
The detention period in a corruption case is commonly extended multiple times until the court reaches a verdict.
Earlier this month, two directors from PDPDE and Dika Karya were named suspects for the same case and detained by the AGO.