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