Erick Thohir Submits Evidence of 'Sin' Procurement of Garuda Indonesia AircraftThem Is Because Of Corruption In The Past

JAKARTA - The Minister of State-Owned Enterprises (BUMN), Erick Thohir, confirmed that the indications of corruption in the procurement of PT Garuda Indonesia Tbk aircraft, which he reported, were not based on mere accusations, but were based on investigative evidence.

There are indications of corruption in the procurement of several Garuda Indonesia aircraft related to leasing or aircraft rental prices agreed between the previous management and the lessor or aircraft charter company. One of the procurements of aircraft types indicated by corruption is the ATR-72 Series 600 fleet.

"Especially today, what the Attorney General's Office conveyed ATR-72-600, we are submitting investigative evidence. Because we are no longer accusing each other, but facts must be given, so they are not accusations", he said at a press conference, at the Attorney General's Office of the Republic of Indonesia, Jakarta, Tuesday, January 11.

Erick said that indications of corruption also occurred in procurement with different aircraft brands. However, Erick is reluctant to divulge any aircraft brands. However, he stressed that the evidence submitted to the Attorney General's Office would be followed up immediately.

"Garuda is currently in the stage of restructuring, but what we already know is how valid the data is in the procurement of its aircraft, in leasing, there are indications of corruption with different brands", he said.

On the same occasion, Attorney General ST Burhanuddin said two things were discussed in the meeting with Erick Thohir. First, in the context of restructuring Garuda Indonesia. Second, is Garuda's reporting for the purchase of ATR-72 Series 600.

"And this is also the main thing that we support the Ministry of SOEs in cleaning up and of course, I also hope for support from the media that a clean SOE will be better. Of course, under the leadership of Mr. Erick, we will do it. The Prosecutor's Office will continue to support it", said Burhanuddin.

For your information, Garuda Indonesia's aircraft rental, which is much more expensive than the market price, has been in the spotlight of various parties. One of them, by former Garuda Indonesia Commissioner Peter Gontha. Regarding the price of the plane, Deputy Minister of BUMN II Kartika Wirjoatmodjo admitted that the rental price for Garuda aircraft was four times more expensive than the global average.

However, said Tiko, the reason for the more expensive plane rental prices was due to poor corporate governance. It is known that the Corruption Eradication Commission decided that there were corruption cases within Garuda Indonesia in the past.

"This also causes contracts with lessor Garuda to be quite high compared to other airlines. There is even data from Bloomberg if we compare Garuda's aircraft rental cost with Garuda's revenue, which is among the largest", he said in a meeting with House of Representatives Commission VI, Tuesday, November 9th.

"So the aircraft rental cost divided by Garuda's revenue reaches 24.7 percent, four times the global average. This is Garuda's condition", he continued.

Therefore, said Tiko, the reason for Garuda's declining performance is due to past corruption. Then, it was made worse by the COVID-19 pandemic.

"This is a difficult situation. On the one hand, Garuda has a high-cost structure, high debt, and a significant eroded revenue base due to the pandemic. So I am often asked what Garuda's performance has decreased because of corruption or the pandemic? Yes, two -both, not one", he said.