T

he Jakarta administration has canceled the procurement of land in Grogol, West Jakarta, for its first city-owned cancer hospital due to a dispute surrounding the sales price, said Jakarta Deputy Governor Sandiaga Uno.

The administration made the decision after the Sumber Waras Health Foundation, from which it had purchased the land at a reportedly inflated price during former governor Basuki “Ahok” Tjahaha Purnama’s term, refused to return some of the procurement money.

The Supreme Audit Agency (BPK) found in 2015 that the land could have been bought for Rp 564.4 billion (US$42.04 million) instead of Rp 755.7 billion as purchased by the city administration in 2014.

In an attempt to untangle the city’s messy annual budget reports and achieve an unqualified opinion (WTP) from the BPK, the administration is attempting to resolve its problematic assets, including the Sumber Waras land.

Sandiaga previously demanded the foundation to return Rp 191 billion and resolve the procurement case, but the foundation has refused .

The foundation claimed it had followed standard procedures upon conducting the sale with the previous administration.

“As the foundation decided [not to return the money], we will cancel the land procurement. The move is made to anticipate any financial losses,” Sandiaga said.

The deputy governor added that he had already instructed the Jakarta Legal Agency to prepare any documents needed for the cancellation.

He has also told his subordinates to prepare another plot of land — either owned by the city or by private parties — on which to build the hospital.

“So, we are opening the opportunity for private parties to join us in establishing the much-anticipated cancer hospital,” he said.

Jakarta Legal Agency head Yayan Yuhana confirmed that her agency was currently preparing the legal documents needed for the cancellation.

The administration, she explained, had two options: Reach an agreement with the foundation or settle the matter in court.

“If the foundation does not agree with us, we will bring the case to court,” she said.

Contacted separately via telephone, a representative of the Sumber Waras Health Foundation, Abraham Tedjanegara, told The Jakarta Post: “[The Jakarta administration] should go to court if it wants to cancel the
procurement.”

He declined to provide further details about the issue.

In its September 2015 report, the BPK stated that the price of the land had been inflated, costing the city Rp 191 billion.

The procurement process started in 2013 when developer PT Ciputra Karya Utama (CKU) planned to buy the land, located in the Sumber Waras Hospital compound, to build an apartment complex with the taxable value of property (NJOP) of Rp 12.1 million per square meter.

The agreement was nullified in March 2014 as the developer could not obtain the permits to develop the project.

In May that same year, Ahok decided to purchase the land for a cancer hospital and asked the foundation to calculate a price according to the NJOP.

The foundation then sold the land according to the NJOP in 2014, which was Rp 20 million per square meter.

The disparity between what was offered to PT CKU and the city administration was later deemed irregular by the BPK.