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.

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