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The Jakarta Post
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‘Procurement failures’ to blame for budget surplus

  • Andreas D. Arditya

    The Jakarta Post

Jakarta | Fri, May 4 2012 | 09:10 am

The City Development Planning Board (Bappeda) has blamed procurement failures for most of its staggering Rp 6.47 trillion (US$705.23 million) surplus from last year’s Rp 31.7 trillion budget.

Wahyu Wijayanto, Bappeda’s head of development-planning information, said Thursday that tender cancellations and underperforming procurements were the major causes of the extraordinary amount of money number, worth a total of about Rp 3 trillion.

Bappeda recorded the failure to hold planned procurement tenders by the administration resulted in Rp 1.3 trillion of the budget left unused. Poor procurement, resulting in substandard goods or services, left around Rp 1.7 trillion in allocated funds not paid to tender winners.

As a result, the administration was not able to use those goods or services, or had to allocate more time for procurements, making it miss its own deadlines.

“All in all, these are the results of poor planning, executing mishaps and internal disorganization at the administration’s institutions,” Wahyu said on the sidelines of a discussion held by the local branch of the Indonesian Chamber of Commerce and Industry (Kadin) in Jakarta.

The Bappeda official said that miscalculations of routine expenses, such as employee salaries and utility bills, and delayed disbursement of financing for the Mass Rapid Transit (MRT) project, resulting in around Rp 600 billion and Rp 500 billion, respectively, in unused funds.

“The rest of the leftover funds resulted from the administration being able to rake in more revenues and to be more efficient in a number of procurements,” Wahyu said.

Last month, Jakarta Governor Fauzi Bowo acknowledged there had been less-than-optimal monitoring in the budget planning, scheduling and implementation phases by his administration. Fauzi said that agencies faced difficulties in fixing prices for land to be procured for city projects, while red tape and legal problems also created delays.

The city’s budget surplus has fluctuated, but with tendency to increase in recent years.

Jakarta recorded a Rp 4.9 trillion surplus for its Rp 26.7 trillion budget in 2010, a Rp 3.7 trillion surplus for the Rp 23.96 trillion budget in 2009, and a Rp 4.44 trillion surplus for the Rp 20.59 trillion budget in 2008.

Andrinof Chaniago, a public policy analyst from the Jakarta-based University of Indonesia (UI), said that the large surpluses showed weakening leadership in the administration.

“The administration has yet to be able to find a cure for its chronic bureaucratic problems. It remains questionable whether the administration has been able to reform the bureaucracy,” Andrinof said.

The analyst said that the administration still faced decades-old questions of whether it could prevent civil servants from taking advantage of procurements and if it had freed itself from intervention from political parties and its elites.

“The underlining issue is transparency. This year’s large surplus is a bad mark in the city’s budget record,” Andrinof said.

This year, the administration allocated Rp 36.02 trillion for its budget, a 13.43 percent increase from
the 2011.

Aside from the Rp 10.4 trillion allocated for education, the city has also allocated around Rp 7.6 trillion to eight priority programs, including transportation development and flood control. About Rp 2.89 trillion is for the Transjakarta Bus Rapid Transit, the MRT system, elevated roads, toll roads and river dredging.


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