The fate of the Bakrie Group in the Cirebon-Semarang Gas Pipeline Project. Page all

JAKARTA, – The Ministry of Energy and Mineral Resources revealed three legal facts, which made the company Bakrie Group, PT Bakrie & Brothers TBk (BNBR) cannot be declared the winner of the auction for the special rights for the transmission segment gas pipe earth Cirebon-Semarang (Cisem).

First, the determination of BNBR which refers to BPH Migas Regulation Number 20 of 2019 is incorrect because the auction conducted in 2006 should refer to BPH Migas Regulation Number 5 of 2005 which does not regulate the determination of rank II as the winner of the auction if the winner of the auction of rank I resigns.

The auction was completed when PT Rekayasa Industri (Rekin) was appointed as the winner of the auction.

“So, the reference in determining BNBR as the second winner replacing Rekin as the first winner referring to BPH Migas Regulation Number 20 of 2019 is incorrect, because the regulation was valid when it was promulgated and does not apply to the auction of previous years or is retroactive,” he said. Head of the Legal Bureau of the Ministry of Energy and Mineral Resources M Idris F Sihite quoted from Among, Sunday (25/4/2021).

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Second, after Rekin resigned as the winner of the Cisem gas pipeline auction, various discussion meetings were held in January 2021 involving the Ministry of Law and Human Rights and the Government Goods / Services Procurement Policy Institute (LKPP).

Yang concluded that with various considerations and legal grounds and based on the principles of fairness, impartiality, openness, efficiency and effectiveness, it is impossible to determine the winner of the Cisem pipeline auction to be given directly to the second winner of the 2006 auction results.

However, it should be carried out through a re-auction or through an assignment to BUMN or through the State Budget.

“Third, if we assume that the determination of BNBR is ‘justified’, it refers to BPH Migas Regulation Number 20 of 2019 where it is stipulated that the winner of the next order auction can be determined as the winner, but the BNBR determination is also not appropriate, because there are many requirements in BPH Migas Regulation Number. 20 of 2019 which are not fulfilled and even contradictory, “added Idris.

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Among other things, the implementation guarantee obligation in determining BNPR as the winner is only one percent of the investment value, whereas when referring to the 2019 BPH Migas Regulation, the implementation guarantee should be five percent.

BNBR only conveyed bank references and not bank guarantees. BNBR also has not submitted feasibilty study (FS) and front end engineering design (FEED), which is based on BPH Regulation Number 20 of 2019, should have been submitted at the time of stipulation. BNBR also has not delivered gas transportation agreement (GTA) with candidates shipper.

As is well known, one of the reasons why after 15 years the Cisem pipeline has not been built is because it does not meet economies of scale. Economic parameters in 2006 are no longer valid to apply at this time.

For example, the size of a pipe designed to deliver 350 MMSCFD of gas is no longer relevant, considering that from the supply side, no one can guarantee such a large gas supply.

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Ideally, the pipe specifications should also be adjusted to the current gas supply and demand so as not to become a burden for the high price of gas for consumers.

However, changing the pipe specifications is a post-bidding act and the auction should have been completed in 2006.

To overcome economic issues and so that the construction of the Cisem gas pipeline can be realized, the Ministry of Energy and Mineral Resources has requested that the construction of the Cisem pipeline be carried out through the APBN scheme.

“The Ministry of Energy and Mineral Resources hopes that the Cisem pipeline project will run smoothly, will not be neglected for a long time, and do not have the potential to cause legal problems,” said Idris.

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“The purpose of constructing the Cisem pipeline transmission section is to ensure that the industry develops well with guaranteed supply and competitive prices,” he said.

In 2006, Rekin was named the winner of the gas pipeline auction. However, after 15 years had passed, the construction never materialized.

Then, on October 2, 2020, Rekin handed over the determination as the winner of the special rights to BPH Migas on the grounds that it did not meet the economic value and certainty of natural gas volume.

Furthermore, on March 15, 2021, BNBR, which was in the second place at auction in 2006, was declared the winner of the auction by BPH Migas.

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