Indonesia to return US$10m to World Bank
Dewi Santoso, The Jakarta Post/Jakarta
The World Bank said on Friday that the Indonesian government had returned the US$10 million in funds publishers here allegedly corrupted from the Book and Reading Development Project.
The World Bank announced in Washington last Tuesday that collusion had led to the procurement of inferior quality books in a school book project and urged the Indonesian government to repay US$10 million of some $53 million disbursed.
"We've informed the Indonesian government about the misprocurement in the project in the second half of year 2003 and we received the $10 million from the government in January this year," said World Bank acting country director Joel Hellman.
The Ministry of National Education's director general for elementary and intermediate school affairs Indra Djati Sidi again refused to comment on the allegation on Friday.
Hellman further said that the Ministry of National Education had been cooperative in handling the case, adding that both the ministry and the World Bank had drawn up action plans together.
As many as 20 private and state publishers and 10 individuals have been blacklisted from any new World Bank-financed contracts for a period of debarment as they have allegedly conducted fraudulent and corrupt practices.
Hellman said the bank had handed the case over to the Indonesian government to deal with the publishers.
He explained that the bank's Sanctions Committee had started investigation in 2000, following a report from an article written in the Indonesian news magazine Tempo, in which allegations of fraud and corruption in the Book and Reading Development Project were made.
"The World Bank has a Sanctions Committee, which examines individual firms that may have been involved in collusion, and the committee found that there was misprocurement in the project," said Hellman.
He explained the committee discovered that in each region of the country, a small group of firms colluded to determine [which publishers] would win the project.
"They (the publishers) then would make a payment of a certain percentage to the groups," he told The Jakarta Post.
This, he said, was not how the project should have been run as the common practice is that it is open to all publishers to compete against one another to win the project in a transparent and healthy way.
He added that the Sanctions Committee had contacted the firms (publishers) about its findings and had issued notices of debarment to firms and individuals allegedly involved.
"All of the firms and individuals are granted the opportunity to dispute the charges, but none of them have made any moves," said Hellman.
However, the secretary-general of the Indonesian Publishers Association Robinson Rusdi said it was not true that the publishers did not reply to the letter.
"They have replied to the letter, but the World Bank acted as if it received no reply from us," said Robinson.
The Book and Reading Development Project began in October 1995 and was implemented by the Ministry of National Education. It was partly funded by an International Bank for Reconstruction and Development (IBRA) loan valued at $132.5 million, which funded the purchase of textbooks for junior secondary schools.
The government disbursed $40 million from the state budget in the joint project. The project closed on Dec. 31, 2002, having disbursed some $53 million of the loan.