Govt to review toll road contracts with private firms

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)