Jakarta Governor in Mission to Rid City’s Procurement Process of Graft

Jakarta Globe, Lenny Tristia Tambun & Markus Junianto Sihaloho, February 19, 2014

The Jakarta administration so far this year has received a total of 656 buses.
(SP Photo)

Jakarta. Jakarta Governor Joko Widodo is using the investigation of fraud into the Rp 113 billion ($9.6 million) purchase of new buses as shock therapy and leverage to rid the city’s notoriously rigged procurement processes of corruption.

Joko and his deputy, Basuki Tjahaja Purnama, vowed to bring those officials involved in the markups in the purchase to justice, an unprecedented move that could set an example of how the country could get rid of corruption in procurement processes, where the state has allocated more than Rp 400 trillion this year alone, making it the biggest potential source of corruption.

Joko vowed on Wednesday to bring all corrupt officials to book, emphasizing the need for stricter monitoring, management control and field inspections as his administration starts to implement a number of high-value projects.

“We need is better management of control. The city’s inspectorate office may be able to handle the smaller ones, but some projects are very big and we don’t have the necessary monitoring measures. That is what we want to do with the project management office,” Joko said on Tuesday.

Among the bigger projects undertaken by the government this year are the mass rapid rransit project, the monorail project, the TransJakarta project and the construction of low-cost apartments, all of which involve trillions of rupiah from the city coffers.

“This is to assist, monitor, control and audit the bigger projects. But we’re still discussing it,” Joko said.

“The city administration lacks control management, but it is impossible for me to check [on the projects] directly. Even the inspectorate cannot do so. We are assisted by the BPK [Supreme Audit Agency] and the BKPP [Financial Development Comptroller]. The inspectorate currently monitors 57 budgets.”

Indications of fraud have emerged from an investigation by the Jakarta Provincial Inspectorate office into the purchase of new buses, after the units were discovered to be unfit for use shortly after arriving in the capital from China, where they were manufactured.

“I have received the report from the inspectorate about fraud involved in the procurement of the feeder buses and buses for the Integrated City Busway facility. Apparently the irregularity was found in the tender procedure,” Basuki said.

The inspectorate had initially found no issues in the administrative process of the procurement, but eventually discovered several irregularities in tender documents, including a significant increase in prices up to the process of determining the winning tender.

“In China [the buses] are supposed to be priced at Rp 1 billion, but instead it is sold here for Rp 3 billion. So if you look at the documents, of course it is China who benefits most, it is very clear,” Basuki said, adding that he would leave the matter to law enforcement to probe.

Further review

Basuki also called on the BPKP to subject the documents to further review by financial experts and those with knowledge of project implementation issues.

He also indicated that those involved in manipulating the documents tozz conceal the foul play, were Transportation Office officials responsible for the budget and members of the committee involved in the tender process.

“They’re all very smart. The tender committee is also full of problems,” he said.

Chairman of the Jakarta Inspectorate office Franky Mangatas Panjaitan said they would be summoning the goods receipt committee as well as the TransJakarta Management Unit to clarify its findings.

“They will be asked to provide information on the goods receipting procedure and documents pertaining to the inspection of goods that were received,” Franky said.

He called on the public to remain patient while waiting for results from the probe, emphasizing that it was necessary for the institution not rush to any conclusions when making its recommendations.

Franky confirmed that there had been indications of fraud in the tender process.

“However the city administration has not yet received all of the units so we can’t come up with a general conclusion just yet,” he said. “We will have to run tests [on the buses] and test their performance. Only then will we be able to make a finding.”

The city administration so far this year received a total of 656 buses, comprising 346 for the BKTB and 346 for TransJakarta. However, less than a month into their use, 10 BKTB buses and five TransJakarta buses were found to be unfit for use, with some of their components not working properly and being rusted.

Some people have also called on the city administration to involve the Corruption Eradication Commission (KPK) in its investigation.

“The TransJakarta case is best handled by the KPK. We are calling on Basuki to be proactive and report it to the KPK,” said Habiburokhman, central executive board chairman for the Great Indonesia Movement Party (Gerindra), of which Basuki is a member.

The KPK has expressed its willingness to support city officials.

“If they want to report it to the KPK then go ahead. However, as of today, we have yet to receive any reports,” KPK spokesman Johan Budi said on Monday, as quoted by Inilah.com.

The procurement of goods purchased by government institutions have become very prone to acts of corruption.

In the most recent case, the Jakarta High Court sentenced former traffic police chief Djoko Susilo to an 18-year prison term for his involvement in the graft-ridden procurement of driving simulators.

Meanwhile, in Banten, the KPK has also uncovered allegations of embezzlement in the procurement of medical equipment for state hospitals in South Tangerang.

The central government has allocated a total of Rp 201.88 trillion for the purchase of goods and another Rp 205.84 trillion for capital expenditure in its budget for 2014.

Additionally, the state has also allocated Rp 341 trillion to provinces and districts across the country.

A recent Indonesia Corruption Watch report showed that up to 98.12 percent of the 267 corruption cases reported in the second quarter of 2013 were in regional government institutions, most in North Sumatra and East Java.

Last year 35 regional chiefs were mired in graft scandals, prompting ICW to warn of a “corruption emergency” in the country.