Kadin asks Pertamina to revise its decision on tender rules
Monday, July 17 2000 - 02:00 AM WIB
The Indonesian Chamber and Commerce (Kadin) has sent a letter to Pertamina, asking the state oil firm to revise its new tender rules that requires all its contractors to present bank guarantee from commercial banks for any project they will participate.
In its letter No. 1291/SKI/VII/2000, dated July 16, 2000, Kadin said that the new ruling burdens small and medium enterprises and reduces the businesses of secondary banks and insurance firms that have thus far provided surety bonds to small and medium businesses to participate in Pertamina's tenders.
"The new regulation will penalize workers of small and medium enterprises and also result in the reduction of customers for secondary banks and insurance firms," Arfan Sufan, a chairman at Kadin, said.
He noted that thus far, small and medium businesses mostly used surety bonds issued by secondary banks or insurance firms when they participate in any tender for Pertamina's projects.
With the surety bonds, the businessmen only pay for the premiums to an insurance company that will later issue the surety bonds or a certain percentage of funds to secondary banks that will later issue the surety bonds.
However, Pertamina's board of directors' ruling No. 027/COOOO/2000 on the requirements for the procurement of goods and services stipulates that contractors must now present bank guarantees from commercial banks instead of surety bonds as bid bond and performance bonds.
Normally, commercial banks charge higher fees for businesses that require their bank guarantees.
Arfan said that Pertamina should revise the ruling and allow small and medium businesses to present surety bonds. But he suggested that Pertamina not accept surety bonds issued by secondary banks or insurance firms that - base on Pertamina's records - are not reliable.
Arfan added that currently contractors were already burdened with some requirements from Pertamina, including a requirement for contractors to deposit funds between 1 percent and 3 percent of the projects value to Pertamina when participating in a tender. And again, after a contractor wins a tender, it is required to pay 5 percent of the total project value to Pertamina.
"That's burdensome, but fine, what can we do?" he asked. (*)