Total says local suppliers must have bank guarantee for contract worth above Rp 1b

Oil and gas company Total Indonesia reiterated on Wednesday that local suppliers must have bank guarantee to join the tender worth more than Rp 1 billion (US$1=Rp 9,400), the local Suara Kaltim daily reported.

The paper quoted company spokesman Nurul Fazrie as saying that for contract worth less than Rp 1 billion, local suppliers was allowed to be only backed by a surety bond issued by five insurance companies including PT Asuransi Jasindo, PT Asuransi Allianz Utama, PT Asuransi Kredit Indonesia, PT Asuransi Jasa Rahardja Putera, and PT Asuransi Central Asia.

The paper said that if the local suppliers or contracts wanted to join the bid worth more than Rp 1 billion they must be backed up by bank guarantee from government banks or other leading banks including Citibank, Standard Chartered Bank, The Chase Manhattan Bank, Deutsche Bank, ABN Amro Bank, HSBC Bank, Amex Bank, Bank Credit Lyonnais Indonesia, Indosuez Bank, Bank BNP Lippo, and Bank of Tokyo Mitsubishi Ltd.

Local office of the Indonesian Chamber of Commerce and Industry (Kadinda) had criticized the Total policy, saying that according to a presidential decree and ruling of the state-owned oil and gas company, local suppliers which has obtain a surety bond can join tender made by oil and gas companies without the Rp 1 billion limit.

The local suppliers had also complained that most of the banks named by Total were not operating in Balikpapan or other areas of the province. (*)