Hambalang Project Corruption Cost State Rp 243b in Losses: BPK

Antara & Ezra Sihite

Irregularities in the Hambalang construction project cost the state Rp 243 billion ($25 million) in losses, in part, because of a pattern of neglect by the Youth and Sports Affairs Minister, the Supreme Audit Agency (BPK) announced on Wednesday.

The agency’s official audit of the graft-ridden construction project found Rp 1.1 trillion in irregularities stemming from forged land deeds, the manipulation of documents to bypass environmental regulations and a rigged bidding process.

“There are indications of irregularities and power abuse, starting from the land-usage permit issued [by the National Land Agency] until the construction process,” Hadi Purnomo, chairman of the BPK, said as he announced his findings to the House of Representatives on Wednesday.

The report stopped short of naming Youth and Sports Affairs Minister Andi Mallarangeng directly, referring to him only by his title.

The deed issued by the National Land Agency (BPN) was based on forged documents from ground’s previous owner, the audit said.

The construction project was given a stamp of approval by the Bogor district chief without first conducting the required environmental impact analysis, according to the report. This was in violation of the 2009 Law on Environmental Protection and Management and local Bogor regulations.

With first conducting the study, Bogor’s United Permit Agency should not have issued a building permit, Hadi said.

The construction tender itself was also rigged to ensure that state-owned construction firms Adhi Karya and Wijaya Karya were both awarded the project, he said. The ministry purposely gave incomplete or wrong information to competing construction firms, the agency found.

Meanwhile, both companies conducted prequalification and technical assessments of themselves, a task usually handled by the tender committee.

Together these irregularities resulted in Rp 243 billion in state losses, Hadi said.

“The state losses were calculated by comparing the funds that had been disbursed by the Ministry of Youth and Sport Affairs with the real value [of the work done by a] subcontractor.”

Andi would have caught these issues if he signed off on project contracts. The minister is required to approve all contracts that total more than Rp 50 billion, the agency said.

“He said ‘I did not know,’ while everybody knew the regulation was published as a state document,” Hadi said. “[The] Youth and Sports Affairs Minister has been neglecting his staff without warning them [of the issues] so they violated government regulations.”

JG/Antara