JP/5/CATTLE

JP/5/CATTLE

E. Kalimantan councillors query cattle procurement

Rusman
Samarinda

The East Kalimantan legislative council will question the
provincial government over an alleged markup in a Rp 12.5 billion
(US$ 1.3 million) purchase of 1,000 heads of cattle from
Australia.

The provincial administration recently purchased 1,000 heads
of cattle for Rp 12.5 billion through contractor PT Indo
Pancadasa Agrotama, which bought the cows from an Australian
company based in Darwin.

Rikmo Kuswanto, chairman of the council's Commission C for
financial affairs, criticized the purchase because it was made
without the approval of the legislature's budget committee. In
addition, he alleged that the deal was plagued by markups.

"Only between Rp 8 billion and Rp 9 billion would have been
spent if the cattle had been bought on the domestic markets. So,
the allotment of Rp 12.5 billion has sparked suspicions of
markups," Rikmo said recently.

The prices of cattle is between Rp 6 million and Rp 7 million
a head on the local market, he said.

The procurement of the Brahma Cross cattle by the East
Kalimantan government was intended to help farmers in 13
regencies and mayoralties. Initial plans called for some 2,000
heads of cattle to be purchased.

Rikmo said the budget committee did not approve the purchase
because the cost of purchasing 2,000 heads of cattle was
considered too high for the provincial government.

The committee then agreed to leave the procurement budgets for
the cattle to the individual regency and mayoralty
administrations, he said.

"But suddenly there were reports that 1,000 heads of cattle
had been ordered from Australia, with more than Rp 12.5 billion
allocated from the province's 2003 budget," he said.

Rikmo accused senior government officials and some councillors
of being involved in a markup scam, as the provincial
administration claimed to have obtained approval to go ahead with
the purchase from the council.

However, any endorsement of the plan did not include the
council's budget committee, he said.

East Kalimantan administration secretary Syaiful Teteng and
budget committee member Kasyful Anwar As'ad denied the markup
allegations.

"It is not true. Everything went through the proper channels.
The budget committee approved the amount of funds to be allocated
for the purchase and the government has the right to determine
the type of cattle to purchase," said Syaiful.

Kasyful agreed with Syaiful. "It is true that initially an
agreement could not be reached and the issue was referred to the
regencies. But finally the allotted funds was approved by budget
committee members. If there were councillors who did not know
about this, perhaps they did not attend the session where the
matter was discussed."

The director of PT Indo Pancadasa Agrotama, Ruben Tumade,
refused to comment on the allegations. "It is not my business. I
only procured the cattle. Nothing else."

He did, however, deny that the purchase of the 1,000 heads of
cattle cost Rp 12.5 billion. "We only received Rp 11.2 billion
(to make the purchase)."

He said the Rp 11.2 billion, which is the specified price in
the contract between the company and the administration, covered
the cost of quarantine and transportation of the cattle to the
regencies and mayoralties.