Govt to review toll road contracts with private firms

JAKARTA (JP): The government will review profit-sharing toll road contracts with private firms and renegotiate deals secured through corruption, collusion and nepotism.

Minister of Public Works Rachmadi Bambang Sumadhijo said on Thursday the renegotiations would be based on whether they conformed to Presidential Decree No. 7/1998 on open and competitive tenders.

"We are inviting all investors. We will not discriminate. The important thing is that we want to uphold the rule of law," Rachmadi was quoted by Antara as saying.

He said his office would take legal action if the negotiations ran into difficulty.

"But before doing so, an interdepartmental team will investigate the contracts concerned to determine whether they were sealed through KKN ways," he said.

KKN is an Indonesian abbreviation for corruption, collusion and nepotism.

Rachmadi said negotiations would involve all investors in the existing 21 projects in operation, under construction or in the stage of land acquisition.

Last month, the government canceled 24 toll road contracts still undergoing feasibility planning because they did not conform to the new presidential decree on tenders.

Director General of Road Construction Tjuk Sudarsono said the renegotiation would primarily address the concession period and profit-sharing ratio.

Set for renegotiation are the lucrative intra-Jakarta toll road projects under former president Soeharto's daughter Siti Hardiyanti Rukmana, Tjuk said.

Many analysts consider unfair the profit-sharing ratio of 75 percent to 25 percent in favor of Siti Hardiyanti.

Rachmadi conceded that toll road investment was not attractive currently because it required a large amount of investment while the toll rates set by the government have remained unchanged for five years.

He acknowledged his office was considering increasing the toll rates but said they would only be implemented once corruption, collusion and nepotism were eradicated from projects.

"I have promised investors that if we cannot get rid of KKN, then don't talk about an increase in tolls," he said. (29)