Rahardi stresses competitive bidding for foodstuff puchases

JAKARTA (JP): The acting chairman of the State Logistics Agency (Bulog) Rahardi Ramelan said yesterday he would review the agency's international tender mechanism for buying foodstuffs but insisted that competitive bidding would be the basic rule of the game.

Rahardi said that competitive bidding would ensure more transparency and efficiency in the importing and procurement of rice and other staples.

"We will arrange competitive bidding, I didn't say tenders. I will review the tender system and discuss it first with my staff," Rahardi said after he took over from Beddu Amang at a simple ceremony.

Bulog's first open rice and wheat tender in August attracted major international interest and so did its sugar and soybean tenders.

The government replaced Beddu -- a long-time Bulog insider who has chaired the agency for the past three years -- with Minister of Industry and Trade Rahardi Ramelan on Wednesday.

The agency will, for the time being, be run jointly by the minister of industry and trade, Minister of Cooperatives, Small and Medium Enterprises Adi Sasono, and State Minister of Food and Horticulture A.M. Saefuddin.

Rahardi said his first priority was to lower the price of rice.

Local rice prices have risen to as high as Rp 4,000 (36 U.S. cents) per kilogram in recent weeks, well above the government's target price of between Rp 1,750 and Rp 2,000 per kg.

Beddu reckoned yesterday he had done a successful job in chairing Bulog for the past three years.

Under his leadership the agency has undergone massive reform, holding international open tenders for the purchase of rice, sugar, wheat and soybeans. Such tenders were unheard of under former president Soeharto.

"The current soaring prices of rice and other staples are partly due to the inadequate domestic rice procurement this year which has caused shortfalls in several provinces," Beddu said.

"Importing it will take some time. It will also take more time to distribute the staples to the various provinces."

Coordinating Minister for Economy, Finance and Industry Ginandjar Kartasasmita said the replacement of Beddu Amang had been in the pipeline for some time and was in line with the government's desire to reduce the agency's role,

"It wasn't a sudden decision," he said. "(Beddu) was honorably discharged from his position; it was long planned."

Speaking at the ceremony, Ginandjar denied speculation that a rift between Beddu on one side and Rahardi and Adi Sasono on the other was a reason for the replacement.

"It's part of the government's effort to streamline, improve our efficiency, and part of the review of the function of Bulog. In a modern society and a market economy, Bulog is just a monopoly," he added.

Bulog's procurement deputy, M. Amin, indicated that the agency's rice tender originally scheduled for Wednesday but postponed by Beddu until Sept. 10 would be annulled.

Bulog said Tuesday that it canceled the tender to buy 600,000 metric tons of rice Wednesday because international prices were too high.

But traders said the cancellation was partly due to the fact that Beddu was on the verge of being fired.

Earlier this month Indonesia agreed to buy 500,000 metric tons of rice from Thailand, but negotiations have since failed over how much Jakarta would pay for 80 percent of the rice, due to be paid in cash.

Another deal to buy 400,000 tons of rice from Vietnam has also been put on hold over how Indonesia should pay. Negotiations to buy 200,000 tons from Taiwan were broken off over Taipei's concerns about attacks on the ethnic-Chinese minority in May.

Under the International Monetary Fund's bailout package signed in January, Bulog's monopoly to import and distribute essential goods, except rice, was supposed to have been removed. However the measure was postponed in June. (gis)