Pipeline project a tender issue

I refer to the article in your paper of Feb. 1 entitled "House member finds fault with Natuna pipeline project."

According to Indonesian regulations, no one, including Mr. Nasution, should have had access to any price information at the time. Your average reader might miss the subtle, but critical implication, regarding the law.

Your article clearly quotes Mr. Nasution as saying "and Daewoo, had high skills and had offered very competitive prices". In the last sentence of the same article the reader finds out that the invitation for the commercial submissions have not even been released yet.

But according to the rules set forth in Indonesia's Presidential Decree Keppres 16, and Pertamina BPPKA's Bulletin 077 governing the tendering process, it would be impossible for anyone to make price comparisons when your article clearly stated that the commercial submissions of the contractors in question had not been made at the time of Mr. Nasution's complaint. Only by going outside the rules of Indonesian regulations for tendering could anyone have had relevant information at the time regarding prices. If Daewoo offered competitive prices, we must ask what these prices were, what they are competitive with, when were these prices offered, and who were the prices offered to?

Further, it appears the Natuna project managers have selected the Indonesian "Two Phase Method" for tendering, (one of the three methods available within Keppres 16). This two phase method is common on extremely complex projects such as the one described in your article, and allows much flexibility in negotiating the technical requirements of the project. But the key reason for allowing such freedom in negotiating technical requirements, prior to receipt of commercial submissions, is to ensure the project's technical success, and to identify and eliminate the contractors that cannot meet the technical requirements. This elimination should be performed without commercial influence.

Having rules to guide us is good, but having officials who are allowed to operate outside and independently of the rules is bad. The act of obtaining and using tendering information prior to the commercial tender submission undermines the intention of the regulations, such as Keppres 16. If your article is accurate in stating that the commercial tenders had not been released at the time Mr. Nasution was making his claims, then it also begs another much larger question: How do companies, such as Hyundai, Daewoo, or anyone else, reach and influence House members prior to commercial tender openings?

BRUCE M. KENNEDY

Jakarta