East Kalimantan council alleges markup in plane, hotel purchases

Rusman, Samarinda, East Kalimantan

The East Kalimantan legislative council will look into cases of alleged markup in the purchases of five Australian planes and a hotel in Jakarta by the provincial administration, councillors said on Friday.

Rikmo Kuswanto, who chairs the council's Commission C for finance, said the investigation would focus on the alleged price markup in the purchases of GA8 planes and the Harco Hotel in Central Jakarta, which he said were never approved by the council.

"The purchases had never been recommended by the legislative body. This is what should be clarified to the public," he said.

He said the local administration bought the five planes a total of Rp 26.5 billion (US$3.08 million), while information from the council's working committee showed their market price to be only Rp 3.2 billion each.

"So the total budget needed for the planes should have been only around Rp 16 billion or a maximum of Rp 18 billion if other delivery expenses were needed," Rikmo told The Jakarta Post.

Likewise, the East Kalimantan government had allotted Rp 12.5 billion to buy the Harco Hotel on Jl. Raden Saleh in Jakarta. The amount increased to Rp 24 billion after it proposed more funds to renovate the hotel.

Although the allocated budget had been endorsed by the council, Rikmo said, it was still "normal" to investigate an alleged markup in the hotel's purchase by actually inspecting the work that was done.

"We want to see if the budget funds spent by the administration is commensurate with the renovation done. If the result is not satisfactory, we will question it further.

"So far we have not received explanations from the executive body about the purchases," the councillor added.

He said the East Kalimantan governor should clarify these things in his accountability report to be presented to the council.

Meanwhile, East Kalimantan administration secretary Syaiful Teteng strongly denied the allegations, claiming that the purchases of the five planes and the hotel were already transparent.

He added that purchases passed existing procedures and scolded the councillors, claiming they had spoken out on issues that were none of their business.

"The purchases are the authority of the executive body and the legislative council should not intervene in this matter. They (the council) should only talk about things they are familiar with and things that are part of their mandate," he said.

Syaiful said the markup case was the authority of administration's supervisory or legal bodies to investigate, not the legislative council.