Planned toll road tariff hike cricitized
Annastashya Emmanuelle, The Jakarta Post, Jakarta
State-owned toll road operator PT Jasa Marga's plan to increase toll road tariffs by as much as 40 percent, in order for the company to avoid bankruptcy, should be delayed pending amendments of several troublesome contracts with private contractors, the Indonesian Corruption Watch (ICW) said on Tuesday.
The private contractors, many of whom are relatives of former President Soeharto, are the main cause for Jasa Marga's loss, due to its troublesome projects and mark ups, according to ICW.
"The inefficiency of Jasa Marga is caused by the inability for the company to be independent which is related to the fact that they are heavily influenced by very powerful people who, may not be the best people for the business," claimed the head of the investigation division of the ICW, Irfan Muktiono.
The comments came on the sidelines of a meeting to discuss a tariff rise for customers using the toll roads.
The director of PT Jasa Marga, Sjarifuddin Alambai, indeed confirmed that the company would increase tariffs, which currently range from Rp 500 to Rp 4,000, in order for the company to survive. The hike is scheduled to be put into effect after it is discussed with the Peoples Consultative Assembly (MPR) in January 2002.
The last hike of the toll road tariffs was in 1996.
According to ICW, most notable among the unfair and somewhat suspect contracts was the one involving PT Citra Marga Nusantara Persada (CMNP) owned by Siti Hardianti Rukmana, Soeharto's eldest daughter. The contract is for the harbor toll road from Tomang to Tanjung Priok, in which CMNP receives 75 percent of the toll road revenues.
Meanwhile, CMNP has not fulfilled its responsibility as stipulated in the original proposal and contract. For instance, the width of the toll road was agreed to be 3.5 meters per lane in the contract, however they only built it 3.25 meters, while taking all the money and in effect shortchanging the public.
Citra Marga Nusantara Persada also received the toll road revenues earlier than agreed. It received Rp 42 billion in 1990 even though it was not scheduled to do so until 1994.
The payment arrangement, which has hurt Jasa Marga's financial condition, was formalized with the joint decree issued by the Minister of Public Works and the Minister of Finance No.524/KPTS/1989 and No.1216/KMK.013/1989 that was put into effect in November 1989.
Another example of ineffectiveness that cheated taxpayers is when Jasa Marga decided to compensate the losses incurred by the construction group, which was awarded the contract, after it had lost money in foreign currency exchange rates, while importing certain materials.
The company, PT Arthayasa Karya Bina Caraka, is owned by Rasich Hanif Radinal, son of the former Minister of Public Works, Radinal Mochtar. The public was again made to take the brunt of the illegal subsidy -- for the supposedly private company -- to the tune of Rp 90.8 billion.
The director of PT Jasa Marga, Sjarifuddin Alambai, acknowledged the loss caused by the company's fraudulent dealings with its private contractors, but amending the profit sharing arrangements would require the revocation of the ministerial decrees, he said.
As for the business arrangement with CMNP, Sjarifuddin said that they had met with a delegation from the company to re- negotiate the terms.
"Hopefully CNMP will be able to reach an agreement with us," he commented.
Meanwhile, the Indonesian Consumer Foundation (YLKI) criticized the price hike, saying that Jasa Marga has often failed to provide adequate service to the consumer and prices should be lowered, or, failing that, the quality must be raised in conjunction with any hike.
"Increasing the toll road tariff ideally should be accompanied by the increase of service and quality. Can Jasa Marga promise to provide better service instead of just making the consumer pay for the ineffective management of the company?" Indah Suksmaningsih, the chairwoman of YLKI asked.