Council queries cattle procurement

Rusman, Samarinda

The East Kalimantan legislative council will question the provincial government over an alleged markup in a Rp 12.5 billion (US$ 1.3 million) purchase of 1,000 heads of cattle from Australia.

The provincial administration recently purchased 1,000 heads of cattle for Rp 12.5 billion through contractor PT Indo Pancadasa Agrotama, which bought the cows from an Australian company based in Darwin.

Rikmo Kuswanto, chairman of the council's Commission C for financial affairs, criticized the purchase because it was made without the approval of the legislature's budget committee. In addition, he alleged that the deal was plagued by markups.

"Only between Rp 8 billion and Rp 9 billion would have been spent if the cattle had been bought on the domestic markets. So, the allotment of Rp 12.5 billion has sparked suspicions of markups," Rikmo said recently.

The prices of cattle is between Rp 6 million and Rp 7 million a head on the local market, he said.

The procurement of the Brahma Cross cattle by the East Kalimantan government was intended to help farmers in 13 regencies and mayoralties. Initial plans called for some 2,000 heads of cattle to be purchased.

Rikmo said the budget committee did not approve the purchase because the cost of purchasing 2,000 heads of cattle was considered too high for the provincial government.

The committee then agreed to leave the procurement budgets for the cattle to the individual regency and mayoralty administrations, he said.

"But suddenly there were reports that 1,000 heads of cattle had been ordered from Australia, with more than Rp 12.5 billion allocated from the province's 2003 budget," he said.

Rikmo accused senior government officials and some councillors of being involved in a markup scam, as the provincial administration claimed to have obtained approval to go ahead with the purchase from the council.

However, any endorsement of the plan did not include the council's budget committee, he said.

East Kalimantan administration secretary Syaiful Teteng and budget committee member Kasyful Anwar As'ad denied the markup allegations.

"It is not true. Everything went through the proper channels. The budget committee approved the amount of funds to be allocated for the purchase and the government has the right to determine the type of cattle to purchase," said Syaiful.

Kasyful agreed with Syaiful. "It is true that initially an agreement could not be reached and the issue was referred to the regencies. But finally the allotted funds was approved by budget committee members. If there were councillors who did not know about this, perhaps they did not attend the session where the matter was discussed."

The director of PT Indo Pancadasa Agrotama, Ruben Tumade, refused to comment on the allegations. "It is not my business. I only procured the cattle. Nothing else."

He did, however, deny that the purchase of the 1,000 heads of cattle cost Rp 12.5 billion. "We only received Rp 11.2 billion (to make the purchase)."

He said the Rp 11.2 billion, which is the specified price in the contract between the company and the administration, covered the cost of quarantine and transportation of the cattle to the regencies and mayoralties.