Defense Communications Satellite Project Loss Rp 814 Billion to the State

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Minister of Political, Legal and Security Affairs, Mahfud MD, said that the Ministry of Defense (Kemhan) lost due to the lawsuit filed by the two companies in the international arbitration court regarding the construction of the Defense Communication Satellite (Satkomhan). The first lawsuit was filed by Avanti Communications Limited at the London Court of International Arbitration on the grounds that the Ministry of Defense did not pay the satellite lease according to the 2015 contract value. Approximately Rp 515 billion on July 9, 2019.

The Department of Defense also lost in Singapore Arbitration Court against Navayo’s case on May 22, 2021, and the Department of Defense was asked to pay US$20.9 million. Navayo is a company specializing in encrypted and highly secure hardware for cyber communication.

Mahfud, at a press conference in Jakarta on Thursday (13/1/2022), said, “Law enforcement conducted an investigation and assessment of some information regarding violations of law that caused state losses through the prosecution.” said.

The lawsuit regarding Avanti began when the Department of Defense signed a contract with the company in 2015, although the department did not yet have a budget for this purpose. The Ministry of Defense also signed a number of contracts for the construction of Satkomhan with other companies, namely Airbus, Detente, Hogan Lovelis and Telesat in 2015-2016. Budget was available for this project in 2016, but the Ministry of Defense blocked it.

According to Mahfud, the state has the potential to incur greater losses as it has the potential to be billed for payments made by other companies involved in the construction of Satkomhan.

“The coordination ministry was commissioned by the president to resolve it based on the cabinet meeting on August 21, 2018. So we have been working for more than 3 years and coordinating with the prosecution,” Mahfud said.

The Minister of Coordination for Political, Legal and Security Affairs also worked in coordination with the Minister of Defense, the Minister of Communications and Information Technologies, the Minister of Finance and the Indonesian Armed Forces Commander and the State Audit and Development Agency. (BPKP) on this issue

Sanitiar Burhanuddin, Attorney General of Indonesia. (Photo: Wikipedia)

Meanwhile, Attorney General Sanitiar Burhanuddin announced that his party will take the investigation of this case to the investigation stage in the near future. however, the state could not disclose the exact amount of losses in the event of the development of Satkomhan.

“There will be an investigation in the near future. We will follow up and the results of the investigation are enough to increase the evidence,” Burhanuddin said in a statement with MD Mahfud in Jakarta.

Diandra M Mengko, Defense and Security Researcher at the National Agency for Research and Innovation (BRIN), said this issue showed a weakness in the Department of Defense’s oversight from DPR Commission I. According to him, DPR Commission I has a supervisory function over budget management in the Ministry of Defense.

Diandra Mengko, researcher at the Indonesian Institute of Sciences (LIPI).  (Photo: INVALID)

Diandra Mengko, researcher at the Indonesian Institute of Sciences (LIPI). (Photo: INVALID)

“Therefore, if there really was a management error or impediment in fulfilling the contract, it should have been identified by the DPR’s I Commission long before the problem lingered as long as it is today,” Diandra told INVALID on Friday, 14/1/2022. said. ).

Diandra added that the government should conduct an objective investigation to see the root cause of this case. The results of the investigation need to be taken seriously by the Ministry of Defense so that it does not happen again. Also, having the function of supervising the budget management, DPR and BPK can detect similar situations as early as possible.

Concerning the construction of satellites, Diandra considered it important that the government has private lines of communication amid the development of information technology.

“So we need better planning regarding future acquisition plans, leases or other plans. The most important thing is careful, transparent and accountable planning.” [sm/ab]

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