Wednesday, 16 February 2011


One of the business platforms most favored by Indonesian businesspeople is to become partner for Government’s projects. Beside highly prospective, government projects normally gives right of monopoly of partners over market which to a certain extent is controlled by the state.

It is not unusual that an ordinary company suddenly grows into a giant company after undertaking Government project such as toll road development, powerhouses, telecommunication etc. but in the era of “Good Governance “, this Government-private collaboration had been frequently accused and often end up in court. It could be because corruption is on the Government’s side, or the private partner reap profit beyond control. The retired economist and ex-Minister Kwik Kian Gie even remarked” It’s allright to make profit, but ethics should be observed.”

The grievances was expressed by Kwik in relation to the “ Sisminbakum” project, i.e registration of companies the electronic way at the Ministry of Law and Human Rights confided to PT Sarana Rekatama Dinamika (SRD) between 2001-2009. for the past two years this project has been an endless controversy and even resulted in unexpected indirect effect, i.e. the resignation of Supreme Prosecutor Hendarman Supanji.

The Sisminbakum (Legal Body Administration) project is meant to replace the procedure of registration by manual way which is regarded as out of date-with speedy computerized system. The registration process may be shortened to a matter of days at maximum fee of Rp 1.3 million per service. The cost is relatively inexpensive considering the benefits and that is exactly the point why the system is applied in the first place.

What has become Kiwik’s grievances is that the initial investment for running the system is only around Rp 500 million to automatocally serve more tan 30,000 late payers, plus new applicants who each day number around 200 applicants. So enormous is the income obtained if the number is multiplied by the access fee being collected. Supposedly in just one short year return will be obtained by the state, but in reality SRD (the company) is given the opportunity to run the system for 10 years.

That is not all. SRD is given the right to control 90 percent of income while 10 percent belongs to the cooperative society of the Ministry. SRD income over the period of “disproportionate revenue Split” reaches more than Rp 400 billions and to be borne in mind the initial capital was only Rp 500”If I as an economist were asked, whether such is proper, the answer is certainly: not proper. It’s Ok Million to make profit but surely to be proper is a must” said Kiwik after expressing his opinion at the Attorney General’s Office (5/1).

From the layman’s viewpoint, deviation in this project is much too obvious. How could services rendered by the Government but the right to manage income is given to private company? How could SRD collect payment on behalf of the state without approval of the parliament? How can it be that the Government receive only a very small portion of income in a decade? And even that small portion is given to the cooperative society, not to the state’s treasurer?

If a private company manages registration of tens of thousand companies in Indonesia, would it not mean to give unfair advantage to a company because the company would know the confidential data of private companies registered in Indonesia ? but in this messy legal system, questions remain unanswered, to make the confusion even worse. This matter had been investigated since October 2008, but when convict was undergoing punishment less than halfway, he was sentenced to full punishment. Ex Minister Yusril Izha Mahendra who was a convict and was deeply hurt, accused the Attorney General at that time Hendraman, and as known the Constitutional Superme Court (MK) was on Yusril’s side. The MK discharged the Superme Court in their verdict set free Romil Atmasasmita the convict but other hand sentenced Samsudin Manan Sinaga in the same cases by the same court. Readers area free to judge what sort of justice is going on in this country.

Cases of unfair distribution of income in Government-private partnership are also happening in many other project. The individual officials are advantaged, but not the state. Definitely the state is disadvantaged. Therefore all cases for big project that are regarded as controversial need to be reviewed, involving auditor team and independent investigators, because there are already articles of the law which regulate obligations to run open tenders for investment of certain value.

For a project which require initial capital of only Rp 500 million, in fact it would not be necessary to involve a private partner, but it should be enough to function petty cash of Ministry’s cashier. As partner, the related private company must be open to inspection and re-ex-aminations by the “project giver” because they will be safe anyway, if only “they do business honestly and properly.”

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