Dedi Mulyadi Slams West Java BUMDs, Calls Out 'Extraordinary Brokering' Practices

West Java Governor Dedi Mulyadi has launched a sharp critique against the management of Regional-Owned Enterprises (BUMD) in his province. He assessed that the operations of several West Java BUMDs are currently rife with brokering practices, lack transparency, and involve illogical cooperation schemes that ultimately harm the regional treasury.

The criticism was delivered by Dedi while attending the groundbreaking ceremony for the Legok Nangka waste-to-energy power plant project in Bandung on Wednesday (29/7). According to him, the irregularities in BUMD management have a direct impact on the public because profits that should be deposited into the regional treasury are instead retained internally by the companies.

Dedi highlighted one practice he deemed nonsensical, specifically regarding the profit-sharing funds from oil and gas managed by PT Pertamina. He argued that these funds should be directly deposited into the West Java Provincial Government’s treasury to finance development.

‘Why isn’t it going directly to the regional treasury? What is the impact? For years, it has gone to the BUMD, and the BUMD has not transferred it to the regional treasury,’ Dedi stated. He added that the funds are often reinvested by the BUMD to create new entities with unclear urgency.

‘Instead of helping development, the profit-sharing funds evaporate without a trace because they are reinvested by the BUMD. They create subsidiaries, sub-subsidiaries, and even sub-sub-subsidiaries,’ he stressed. Dedi acknowledged that he has reported this anomaly in bureaucratic governance directly to President Prabowo Subianto.

Beyond the oil and gas issue, Dedi also scrutinised the cooperation scheme for the provision of Trans Jabar mass transportation between the West Java Provincial Government, the BUMD PT Jasa Sarana, and PT DAMRI. He believes the BUMD’s involvement in this project merely creates a bureaucratic chain that burdens the regional budget.

Under the current scheme, the West Java Provincial Government does not pay DAMRI directly but instead channels payments through PT Jasa Sarana. As a result, the BUMD enjoys a double profit from a percentage of the contract value and operational fees from provincial revenue.

‘Jasa Sarana gets two things: one, 5 percent of the IDR 120 billion contract; two, operational costs from the provincial revenue,’ Dedi explained.

As a corrective measure, Dedi confirmed he will revise the cooperation scheme starting next month. He asserted that he will sever the BUMD’s role as an ‘intermediary’ in public services that can be conducted directly.

‘Next week I will change the strange ones again. Starting in August, I will cut it out, the provincial government will deal directly with DAMRI, no more going through Jasa Sarana. This is extraordinary brokering, and it has been going on for years,’ he concluded.

Dedi hopes that by cleaning up brokering practices within the BUMDs, West Java’s Regional Original Revenue can increase significantly and the benefits can be felt directly by the public through tangible development programmes.