ADB to help government set project cost benchmarks

JAKARTA (JP): As part of efforts to curb rampant corruption in the country, the Asian Development Bank (ADB) will assist the government in designing a benchmark for procurement prices of government programs, said a senior ADB official.

ADB programs department director Shoji Nishimoto said on Thursday the benchmark would minimize the risk of corruption in government-financed projects.

"This will significantly reduce funds from being misappropriated," he told a news conference, following a workshop on good governance and anticorruption efforts jointly organized by the government and the bank.

The workshop was also attended by World Bank officials.

Shoji said either the Ministry of Finance or the National Development Planning Board (Bappenas) would coordinate with ADB in designing the project procurement benchmark.

"With this, there will be a certain benchmark for developing a one-kilometer road," he said.

He said that in the past, government-sponsored projects were easily marked up because of there was no such system in place.

Shoji said the bank would also demand the government disclose the criteria for the project bidding.

He declined to indicate the magnitude of ADB funds misappropriated in the country, saying "you can judge by yourself".

Local economists have indicated some 30 percent leakage in government funds.

An internal World Bank report leaked to the media a few months ago pointed out that some 20 percent of WB funds in Indonesia had been misappropriated.

When asked to comment on the World Bank figure, Shoji said: "We shouldn't be too different, because we're swimming in the same ocean."

The government, under fire over rampant corruption in the country, recently issued an announcement on the amount of corruption in each of the ministries. The disclosure received a cool response from the public, as the government failed to disclose the names responsible for the corruption or to pursue legal measures.

Critics said the move was a political maneuver by incumbent President B.J. Habibie in the run-up to the presidential election.

Habibie has yet to prove his seriousness in investigating allegations his former mentor president Soeharto corruptly amassed some US$15 billion during his 32-year rule.

The ADB announced on Thursday a 20-point anticorruption action plan to be implemented by the government within a three-year period.

The bank said it was considering new loans for the country to help finance efforts to create a market-based and competitive trade and industry regime.

ADB said it would provide technical assistance to boost the capability of state audit agencies.

A possibility of introducing an external audit on government- finance projects is also being considered.

The action plan also includes organizing seminars for various audiences, but has no details relating to prosecution of corrupt individuals. (rei)