Dahlan to scrap direct appointment mechanism at PLN

President director of state-owned power company PT PLN Dahlan Iskan said Tuesday he would scrap the direct appointment in the procurement of goods and services at the firm for the sake of efficiency.

Dahlan said he would scrap a decree that justifies the mechanism, which according to the 2003 presidential decree is allowed only for procurement projects worth Rp 5 billion (US$550,000) or less.

“I will revoke the [direct appointment] decree immediately,” Dahlan was quoted as saying by tempointeraktif.com.

Dahlan said that without the direct appointment mechanism, suppliers would have no access to order or ask for a privilege. “Suppliers must understand that procurement [at PLN] is strictly supervised by the KPK [Corruption Eradication Commission],” he said.

PLN has allocated around Rp 100 trillion per year for procurement. The huge amount is prone to embezzlement and graft, said Dahlan.