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Jakarta will not pay for 531 Chinese buses

The fate of 531 buses ordered by the city administration to augment the Transjakarta fleet remains unclear as the Attorney General’s Office (AGO) investigates the Rp 1 trillion (US$87 million) graft case surrounding the buses’ procurement

Corry Elyda (The Jakarta Post)
Jakarta
Wed, May 14, 2014

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Jakarta will not pay for 531 Chinese buses

T

he fate of 531 buses ordered by the city administration to augment the Transjakarta fleet remains unclear as the Attorney General'€™s Office (AGO) investigates the Rp 1 trillion (US$87 million) graft case surrounding the buses'€™ procurement.

Jakarta Deputy Governor Basuki '€œAhok'€ Tjahaja Purnama reiterated that the city administration would not pay the remaining bill for the buses, the first sample batch of 14 having arrived in Jakarta damaged and faulty.

'€œIf 14 buses are faulty, other buses may also have similar problems,'€ he said at City Hall on Tuesday.

The city administration ordered 656 articulated and single buses from China to be delivered in 14 packages through an open tender last year. On behalf of the city administration, the Transportation Agency has already paid Rp 564 billion for 125 of the buses, which have been delivered in four packages and have entered into operation. The agency has also paid a 20 percent down payment on the remaining buses.

Media coverage of the defective and damaged buses in the first shipment prompted Governor Joko '€œJokowi'€ Widodo to cancel planned payment on the 531 remaining buses and request the AGO to investigate alleged wrongdoing in the procurement.

The AGO has so far named four suspects in the case: former Transportation Agency head Udar Pristono, transportation system and technology director of the Agency for Assessment and Application of Technology (BPPT) Prawoto, Transportation Agency budget authority holder Drajat Adhyaksa and the agency'€™s bus procurement bidding committee chair Setyo Tuhu.

The AGO is expected to question other officials, including the head of the Transportation Agency vehicle testing center and the head of the public service section at the Tanjung Priok Customs and Excise office.

The city purchased the buses from Chinese automobile manufacturing company Ankai for Rp 3.6 billion apiece.

According to the Jakarta Development Finance Comptroller (BPKP), that price was inflated by Rp 300 million per unit, as each bus should only have cost Rp 3.38 billion.

Additionally, Ahok said the city administration would reject the 531 buses, which earlier arrived in Jakarta, because they were delivered well behind schedule.

'€œThe buses arrived 50 days after the scheduled delivery date and that is not tolerable. They were long overdue,'€ he said.

According to Presidential Regulation No. 70/2012 on goods and services procurement, when vendors fail to deliver goods more than 49 days after the agreed date, the administration can terminate the contract unilaterally.

Ahok said that in order to get the best quality buses, he did not mind halting the procurement process. '€œI will not use the buses even though we are running short of buses to strengthen the Transjakarta fleet,'€ he said.

As it looks to procure replacement buses, the city administration will not hold an open bid but will rely on the Government Procurement Regulatory Body (LKPP) to purchase new buses '€” possibly from German automaker Mercedes-Benz or Swedish company Scania '€” via an e-catalogue considered less prone to graft.

The deputy governor also said he would be prepared should the Chinese company seek to sue the administration in Indonesia or at an international arbiter. '€œIf we lose, we will simply pay the penalty,'€ he said.

Meanwhile, new Jakarta Transportation Agency head Muhammad Akbar said his agency had not yet decided what to do with the 531 buses.

'€œThe buses may be deemed damaged, so we will not use them until they are cleared,'€ he said.

Separately, Udar admitted there were irregularities in the bidding process. '€œThe 14 faulty buses were accidents. I also received the report. The vendors simply need to replace the buses that are not in line with the contract,'€ he said.

He went on to divert blame for those irregularities, saying that the governor and the City Council had signed off on the bidding process. '€œI only do what the governor asks me to do,'€ he said.

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