KKN in state enterprises

KKN in state enterprises

From Bisnis Indonesia

With reference to a report in Bisnis Indonesia, June 20, on
supplies of goods and services undertaken by state enterprises
(BUMNs), I am of the opinion that not all BUMNs are ready to
receive complaints from the community as regards mark-up
practices in the supply of goods, work contracts, etc.

It will be better if BUMNs/government banks/agencies are open
to criticism and provide a special post office box for complaints
lodged by the public.

Practices of corruption, collusion and nepotism (KKN) are
still rife in the process of making decisions on work
contracts/tenders. Winners of tenders and contract prices are
generally arranged beforehand. In view of the prevailing reform
atmosphere, KKN practices must be eliminated from these.

Goods purchased by BUMNs/Pertamina/government agencies, for
example, may be 200 percent to 300 percent higher in price than
those sold in the market. Similarly, mark-up practices are also
found in the case of imported goods. In this case, the buying
agent is directly appointed and then the factory abroad will
issue a letter confirming that the prices quoted are the right
prices. Everything is arranged by the buyer, the agent and the
overseas factory. Actually, the market prices of imported goods
in a country of origin or in other countries must also be
checked. Then these goods are compared with similar goods of
different makes. In this way it will be known whether there is a
price mark up.

If reform is to be implemented and KKN practices eliminated,
don't go halfway and don't consider only large cases. KKN
practices which are found every day must be the first to go. It
is usually the case that a BUMN/government agency, for example,
insists on purchasing an item from its regular supplier under the
pretext that it is standing procedure. In fact, the same item is
available from an independent seller at only a quarter of the
price quoted by the regular supplier. Practices like this must be
immediately stopped.

The requirement that goods and services must be obtained only
"from regular suppliers" is one of the causes of high costs and
also one of the factors leading to KKN practices. BUMNs must be
open to the entire community, not to agents and the like only.

So, big contracts must be reviewed to find out whether the
routine needs of BUMNs have been properly purchased. KKN
practices in routine matters must be stopped right away while
efforts are made to eliminate such practices in the other
activities of the enterprises/government agencies.

Name and address

known to the editor