Property swaps must have president's nod

Property swaps must have president's nod

JAKARTA (JP): The Ministry of Finance is warning government
officials to seek permission from the President or the finance
minister if they plan to sell or exchange state-owned property to
private sector companies.

Agus Haryanto, a spokesman for the Ministry of Finance, said
in a statement on Monday that ruilslag (Dutch-derived word
meaning property exchange) should not inflict financial losses on
the state.

Lawyer Frans Hendra Winarta said yesterday that the ruilslag
should be regulated and its implementation should be discussed at
the House of Representatives (DPR).

The noted political analyst and lawyer doubted whether the
decision could economize the use of state assets.

He warned that as long as the public has no control over state
property, abuses of power will go on.

"State assets actually belong to the people. The government
cannot exchange the assets without permission from the people,"
Frans told The Jakarta Post in a telephone interview.

The practice of exchanging state property, such as a plot of
land located in a strategic place, with another kind of property
built by private investors, is prevalent among government
officials who are seeking to overcome shortages of funds in their
respective institutions.

Ministry spokesman, Agus Haryanto, said Ministry of Finance
Decree No. 350/KMK.03/1994, signed by Minister of Finance Mar'ie
Muhammad on July 13, but not announced until Monday, regulates
ruilslag in a bid to implement Presidential Decree No. 16/1994 on
the use of state budgets.

"State property, such as a plot of land, could only be
liquidated, sold, handed over, exchanged or donated, with the
permission of the President through the recommendation of the
minister of finance," he said.

Mar'ie himself is currently on a trip to major world cities,
including London, Washington, New York, Ottawa and Hong Kong, to
discuss financial matters with officials there. He started the
trip on July 13 and is scheduled to come back today.

Progressive

Referring to the ministerial decree as a progressive
instrument for blocking government officials from selling state
assets arbitrarily, analyst Arief Budiman of the Satya Wacana
Christian University in Salatiga, Central Java, said that
transparency in state-linked transactions should be a priority.

"The point here is that the public should be able to control
the administration," Arief said. "But I am pessimistic about this
in the current situation."

The decree stipulates that the acceptable reasons for allowing
ruilslag are to cope with a new master plan, to optimize idle
plots of land, to increase efficiency through building
relocation, to fulfill organizational demands and to accommodate
special purposes, such as meeting military needs.

The decree also requires bidding procedures which include the
participation of a minimum of five bidders, the involvement of
independent consultants and the inspection of the property to be
exchanged.

The Ministry of Finance estimates Indonesia's state assets at
Rp 53.7 trillion (US$24.8 billion) as of April 1, 1994. The
assets consist mostly of land and buildings. (09)