WB asks RI to repay debt after fraud

WB asks RI to repay debt after fraud

Following a thorough investigation since late 2000, The
World Bank declared on Tuesday in Washington that collusion had
led to the procurement of inferior quality books in a school book
project here and requested that the Indonesian government repay
US$10 million of some $53 million it has disbursed.

It also asked the government to prepare and implement an
acceptable action plan to improve the procurement process in the
education sector.

As many as 20 private and state publishers and 10 individuals
have been blacklisted from any new World Bank-financed contracts
for a period of debarment for alleged fraudulent and corrupt
practices in the project, it said in a statement issued from
Washington. It did not elaborate.

"The funds we lend must go to help the people of Indonesia
reduce poverty. The World Bank has worked closely with the
Government of Indonesia to uncover and correct the diversion of
funds from this project through corrupt practices," World Bank
Country Director Andrew Steer said in the statement.

The statement is available on www.worldbank.or.id.

It was not clear how the World Bank would press for its
demand.

The Book and Reading Development Project, which began in
October 1995, was implemented by the education ministry. It was
funded in part by an International Bank for Reconstruction and
Development (IBRD) loan valued at $132.5 million, which funded
the purchase of textbooks for junior secondary schools.

The government also disbursed $40 million from the state
budget in the joint project.

Four rounds of textbook procurement from 1996 to 2000 were
earlier planned for the project. However, the last procurement
was canceled. The project closed on Dec. 31, 2002, having
disbursed some $53 million of the loan.

The World Bank, which initiated anticorruption efforts in
1996, started the investigation following an investigative report
in weekly magazine Tempo, which revealed fraud and corruption in
the project.

The report suggested collusion by some officials from the
education ministry and the publishers due to nontransparent bids,
which resulted in poor quality school books distributed across
the country.

Several education experts said that the books contained major
mistakes.

Indra Djati Sidi, the education ministry's director general of
elementary and junior high school affairs, could not be reached
for comment while the Indonesian Publishers Association (IKAPI)
has yet to be informed about the issue. -- JP