Jasa Marga loses Rp 2.1b in markup

Jasa Marga loses Rp 2.1b in markup

JAKARTA (JP): PT Jasa Marga, the state-owned toll-road
developer and operator, has lost Rp 2.1 billion (US$917,030) in
bad credits due to mark up practices by some officials of the
Ministry of Cooperatives and Small Enterprises, a spokesman said.

Jasa Marga's public relations officer, Yunial Harun, told
newspeople that the loss incurred in its lending programs for
small firms and cooperatives had been caused mainly by officials
who pocketed part of the loans originally extended to small
borrowers.

"Some officials in charge of administering loan applications
from small borrowers to Jasa Marga had deliberately marked up the
sums of the loans asked for and pocketed the balance," Yunial
said.

The provincial offices of the cooperatives ministry are the
only institution in Indonesia's 27 provinces authorized by the
government to distribute small-scale credits from state-owned
companies, including Jasa Marga, to small-scale businesses and
cooperatives.

"Every soft loan to be given by state firms to small
businesses and cooperatives has to be endorsed by them," Yunial
said.

Jasa Marga and all other state-owned companies have been
required by the government to set aside up to 5 percent of their
net earnings for helping small businesses and cooperatives.

Yunial said several cooperatives officials apparently have
abused the authority by inflating the sums of the loans written
on the application forms.

Citing an example, he said a small-scale businessman wanted to
get a loan of Rp 2 million from Jasa Marga and an official in
charge of administering the application marked up the loan to Rp
3 million and pocketed the balance.

"When the borrower asked the official to repay the balance
upon the maturity of the loan, the official simply said the loan
should not necessarily be repaid because Jasa Marga will not take
any measures against defaulting borrowers," he said in recounting
one instance.

Commenting on Jasa Marga's complaints, Minister of
Cooperatives and Small Enterprises Subiakto Tjakrawerdaya said
yesterday that he will deal firmly with officials committing mark
up practices.

"I'll move against the officials," he told the press.

Mark up practices are reportedly common in Indonesia and have
been cited as one of the reasons behind the Rp 9.9 trillion in
bad credits suffered by banks until June this year. (13)