Govt to get tough on developers

JAKARTA (JP): President Soeharto has ordered State Minister of Public Housing Akbar Tandjung to step up efforts to reduce the incidence of cheating on the part of housing developers.

Speaking to reporters after meeting with Soeharto at the Merdeka Palace yesterday, Akbar said the President wanted stricter controls on housing developers, to ensure that they abided by the "balanced-housing" concept.

The concept, introduced in 1992, requires developers to build six low-cost and three medium-cost houses for every luxury house they build.

Ever since its introduction, however, reports have shown that numerous developers have ignored obligation to build low-cost and medium-cost houses, which offer low profit margins.

"The President has stipulated that there will be no room for compensation. This means that developers cannot substitute the construction of the low-cost and medium-cost houses for a certain amount of money," he said.

He said the President had emphasized the need for low-cost housing because there was currently a large demand for housing on the part of people with low incomes.

"The National Housing Board and its regional offices across the country will intensify control over this matter," Akbar pledged.

The National Housing Board, which is responsible for policy- making, problem-solving and supervision of housing development, consists of government officials from various related offices.

The board, which has regional offices across the country, is headed by the state minister of public housing.

Akbar said the President had also called for greater control over developers that have been cheating customers into paying for houses but then failing to meet their expectations or, even worse, not building the houses at all.

Nine such "fictitious houses" have been reported so far.

Separately yesterday, Tini Hadad of the Indonesian Consumers Protection Agency told reporters that buyers have been complaining about fictitious houses offered by PT Cantilan Windu Kencana, PT Miyagi, PT Tigaputra Inti and PT Jaya Graha in Bekasi; PT Pramitra Antar Sejahtera and PT Sapta Utama Intercom in Tangerang; and PT Manunggal Adisiwi and PT Bumiayu Sakinahcitra in Bogor.

Meanwhile, PT Kalasutra Indah Sejahtera was also reported to have cheated some 3,000 prospective buyers of low-cost and medium-cost houses.

"The government, which has the right to issue building licenses and to carry out monitoring activities, must take full responsibility for these frauds," Tini said.

Akbar said yesterday that several cases have been handed over by his office to the police.

"The government will step up control to prevent further fraud from occurring. This will be done by, among others things, monitoring the activities of developers after they have been licensed," he said, adding that the monitoring would be conducted by the housing body's regional offices.

Akbar said he issued a ruling last June on house transaction procedures.

The regulation, he said, allows transactions to take place only after a housing developer has obtained the licenses needed to start construction.

"Only after the developers have obtained these licenses can they enter into binding transactions with their customers, such as through booking fees," he said.

"If the housing board finds out that developers which have not obtained the complete set of licenses are collecting money from customers, it will take legal action against the developers," Akbar said. (29/pwn)