Power projects' proposal draws fire

Controversy continues to dog the government?s plan to fast track the construction of several coal-fired power plants, which was ignited by an initial suggestion that contractors should be directly appointed instead of picked through a lengthy bidding process.

Although the government later said the Rp 72 trillion (US$8 billion) projects needed to prevent Indonesia from a future energy crisis would be offered through open bidding, its insistence on an ?accelerated? bidding process is keeping alive concerns of possible corruption and collusion.

The coordinator of the Working Group for Power Sector Restructuring, Fabby Tumiwa, insisted Sunday the government must offer the projects through a bidding system conforming to international practices of transparency and fairness.

?The government must ensure that the bidding process does not stipulate certain requirements, like the use of particular technology, that we know would be meant to benefit and single out certain bidders,? he told The Jakarta Post.

?Power projects always mean big business for investors, but they must be carried out through fair yet strict bidding to protect the public?s interest.?

Legislator Didik J. Rachbini of the National Mandate Party said a hasty bidding process was not an option for any project of high concern to the public.

?Every major infrastructure project using public funds must be offered through an appropriate bidding process,? he said. ?If it?s done any other way, it will always be prone to distortion through collusion and corruption.?

The government, as reported by Koran Tempo daily last week, plans to embark on a ?crash program? for the development of the power sector, which includes the setting up of a local consortium to support the construction of several coal-fired power plants, totaling 10,000 megawatts (MW) in output over the next three years.

The consortium would handle construction of plants with capacity under 135 MW, while higher output plants would be offered to multi national power firms.

Questions were sparked by the disclosure that the consortium consisting of PT Bukaka Teknik Utama, PT Bakrie & Brothers and PT Medco Energi, would be directly appointed to construct the plants. Bukaka president Achmad Kalla is the brother of the country?s Vice President Jusuf Kalla, while Bakrie & Brothers is linked to Coordinating Minister for Public Welfare Aburizal Bakrie.

Presidential Regulation No. 8/2006 requires open bidding for all government procurement projects valued at more than Rp 50 million, exempting those concerning national security and emergency situations.

Kalla eventually responded to the criticism by saying the process would still involve bidding, although it would be expedited to three months from the usual year. He argued the shortened process was important to reduce the country?s dependence on more expensive oil-based plants, which were a burden on the state budget. (*)