- To: Japan International Cooperation Agency (JICA)
Subject:  Intervention on MRT Jakarta tender process.

Since several KPU commissioner captured in 2004, followed by many other high ranking government officials also captured related to their corruption, collusion and nepotism cases in tender/procurement process and other misconduct practices, the government has issued Presidential Instruction No. 5/2004 to strengthen the anti corruption actions. Article 6 on that provision stated the instruction to consistently implement the Presidential Decree No. 80 year 2003 regarding the Government Guideline on the Procurement of Goods and Services, to prevent various leakages of the state money/fund that comes from APBN and APBD.
Since that Presidential Instruction established, the Indonesia Procurement Watch (IPW – one of Indonesian NGO which focus on procurement process) join the KORMONEV Team, formed by the State Ministry for Empowerment for Administrative Apparatus (Men-Pan), to conduct the coordination, monitoring and evaluation of the Presidential Instruction No. 5.
After 5 years of the service, KORMONEV concludes that after the above Presidential Instruction established, the Indonesian government have been able to continuously improving the rules and regulation for the tender process. In 2006 the government have made further revision to the Presidential Decree No. 80/2003, and issued the Presidential Regulation No. 8 year 2006.
Such efforts are now well recognized. Although it may not been perfect yet, generally the tendering processes getting better compare to the past situation. Healthier competition, transparent and professional environment have been achieved, and corruption-collusion-nepotism among the tender committee has been decreasing.
Contrary to that positive development, what was happened in the Jakarta MRT Mega Project tender process which have been running for 15 months without any clarification, surprisingly not in line with what has already accomplished by the Indonesian Government together with various Anti-Corruption Institutions in Indonesia. We conclude that some unreasonable process have been occurred during the tender process.
The Jakarta MRT basic design tender process which have been going for 15 months, is indicated  not in accordance with the rules and regulation of the Presidential Decree No. 80/2003 and Presidential Instruction No. 8/2006 regarding the Government Guideline on the Procurement of Goods and Services. The Jakarta MRT tendering process indicated to violate the provisions of Law No. 5/1999 regarding an un-healthy Business Competition and Anti Monopoly.
As a result of IPW investigations to the whole Jakarta MRT process, we discovered that the root of the problem lies on the persistent interventions by  JICA during the tendering process. JICA behaviors can be read as a subjective affirmation to one participant, the practice which is against the tender rule in Indonesia. This subjective affirmation had been expressed i.e. by the letter from JICA Expert Mr. Y. Miura which was dispatched to the Director General of Railways and Minister of Ministry of Transportation in the middle of the tender evaluation process, only after several weeks of his assignment in Indonesia. The resume of that letter are as follows:
1.    Intentionally influencing the Director General and the Minister to grant higher score to a certain tender participant;
2.    Take down other participant reputation.
This action is indicated as violation to the tender rule in the Request for Proposal (RFP), which is the only legal guidance document given to all participants. On page 14, point 5.1 stated: From the proposals are opened to the time the contract is awarded, any effort by the firm to influence the Employer’s Proposal evaluation, proposal comparison or Contract award decision may result in the rejection of the Consultant’s proposal.
In connection with that, the Presidential Decree No. 80/2003 as the tender regulation in Indonesia, on Chapter V (guidance and supervision) - Part Third (follow-up of supervision) - Section 49, Article 2; stated clearly to prohibit the participants:

a.    try to influence the committee / official functionary in any forms or ways, either direct nor indirectly; which is against the conditions and procedure have been specified in the tender document / contract, and / or conditions of others law and regulation which is applied.
b.    Make and / or convey the document and / or other information which is not true in order to fulfill the tender requirement of goods / service procurement which is determined in procurement document;
In addition to that, based on Section 49, Article 1, is written:
To the parties that violating the provisions and procedures of procurement of goods/services, then:
a. Should be imposed to the administration sanction;
b. Demand compensation / sue in civil;
c. Filled to the civil process.
More severely, another violation letters sent by NK to the Director General of Railways as attached herewith and to the Minister of Transportation (in a separate two letters). These NK letters is seriously violating the tender rule (in RFP) and Presidential Decree No. 80/2003 as well. Penalty to NK is definitely to be imposed, who is destroying the  Tender Rule in Indonesia.
According to our further investigation, the points stated by NK are:

1.    Un-true, degrading other tender participant and misleading information
2.    The statements are prohibited because it is violating the provisions of the tender regulation (post bidding).
Indeed, in a tendering process, the tender participants are prohibited from making any attempt to influence the client to distort the objective tendering evaluation result.
With refer to the tragedy in the history of bridge construction - the broke and collapse of the Cần Thơ bridge in Vietnam recently (it will be the longest main span cable-stayed bridge in Southeast Asia) with so many victim died and injured, we have to avoid such disaster occurred in Indonesia.
For that purpose, IPW would like to ask JICA as follows:
1.    To respect the tender rules in Indonesia.
2.    To act professionally and independently.
3.    To promote an independent and healthy competitions.
4.    To be concerned to the Indonesian public interest in having the best possible MRT.
5.    Do not press the Indonesian Government (Ministry of Transportation - MOT) in any way and any manner in Jakarta MRT tender nor on any JICA related projects. JICA, as a lending agency appointed by the Japanese government to administer the loan disbursement should not capitalized or make use the function to abuse good governance development effort in Indonesia.
6.    In order to build JICA integrity to become a more respected Lending Agency, JICA should not behave and act on behalf of the interest of any tender participant regardless of the emotional relationship (in this particular MRT Jakarta project, between JICA staff officials with ex JICA high officials in a certain tender participant).

7.    Immediately stop the intervention to the MRT Jakarta tender process which been conducted by the committee, and no more direct communication is allowed between JICA or other agencies to the (independent) tender committee. Formally and ethically, JICA communication should be through the Director General, and any important matter should written in the formal letters.

As a result of series of interventions by NK, evaluation of proposals took 6 months, while the following interventions of JICA concurrence by JICA is delaying another 6 months. Therefore more than one (1) year already passed since Technical Proposal has been submitted, becoming one of the longest tendering process record.

We would highly appreciate if JICA can positioned its role to become a more professional  lending agency. We do appeal JICA do not tolerate any misconduct practices in their services, or otherwise such improper practices will creates moral hazard among our institutions and will have an epidemic impacts; which is completely against our national standing effort to totally fight corruption-collusion-nepotism in our country. We really expect JICA to contribute, support and to encourage good governance development implementation in Indonesia (not on the reverse direction).

Your kind respond and prompt action to the subject will be highly appreciated.

With regards.

Jakarta, 9th of June, 2009.
Indonesia Procurement Watch,



Hayie Muhammad
Director of Investigation/Program

cc:
1.    The Japanese Ambassador to Indonesia, in Jakarta;
2.    Business Competition Supervisory Commission of RI ( KPPU);
3.    Institute of Government Procurement Policy / LKPP;
4.    President of Japan International Cooperation Agency (JICA), in Tokyo;
5.    Minister, Ministry of Transportation;
6.    Minister, Ministry and Head of Bappenas;
7.    Minister, Ministry of Finance;
8.    Minister, Ministry of Foreign Affairs;
9.    Inspector General, Ministry of Transportation;
10.    Secretary General, Ministry of Transportation;
11.    Director General of Railways, Ministry of Transportation;
12.    Print and Electronic Media;
13.    The people of the Republic of Indonesia;
14.    Archive.