Andrzej Jeziorski/SINGAPORE
Corruption has cost Garuda Indonesia at least $1 billion since 1989, says local independent watchdog group Indonesian Corruption Watch (ICW).
In a statement to the parliamentary commission for transportation and infrastructure and Garuda management, the ICW claims that most of Garuda's "huge" debts have been caused by corruption and mismanagement of aircraft procurement and maintenance projects in this period.
The projects involved in the allegations include the leasing of four Airbus A330-300s from a joint venture of Japanese financial house Yamasa and a consortium of banks led by Morgan Grenfell; the leasing of two Boeing 747-200s from Japan Fleet Service; the leasing of a 747-400 from International Lease Finance; and a maintenance agreement covering 17 Fokker F28s with Merpati Nusantara and PT Sakanusa Dirgantara.
Faced with demands from the commission for an investigation, Garuda president Abdulgani has promised to form a team to examine the cases, admitting the possibility of impropriety in these projects. Garuda has submitted documents on eight projects to the Attorney General's office.
Garuda says it hopes to establish the substance of the commission's claims and will set up an audit committee "fairly soon" to examine them. "We would like to give a description of the background why we did what we did at the time. To some degree what we have done is not really accurately described by the [ICW] report," says Garuda, adding that the estimate of a $1 billion loss due to corruption is "not quite accurate".
Abdulgani apologised for being unable to immediately sort out all cases of corruption and collusion at once, saying the airline management's main focus over the past couple of years has been "solving problems related to negative cash low and debt restructuring". Last year's 617 billion rupiah ($61.7 million) net profit followed losses from the early 1990s.
In 1998, Garuda said it would cancel five contracts with companies associated with deposed former Indonesian president Suharto, as a first step towards cleaning up the company.
Source: Flight International
