E-tendering will improve transparency, official says

Andi Haswidi, The Jakarta Post, Jakarta

As part of the effort to strengthen transparency in the procurement of goods and services, State Minister for National Development Planning (Bappenas) Paskah Suzetta launched the first stage of an internet-based procurement system Friday that will eventually cover all government projects,

Paskah said the system, which during the first stage would provide information on development projects to be put out to tender, would eventually incorporate the e-procurement systems already operated by a number of ministries and government agencies.

He said the new procurement system would not only speed up the tender and procurement process, but also save taxpayer money.

"As regards measures to increase transparency in line with the 2003 presidential decree, we have managed to save between 20 and 40 percent of the procurement budget from 2004 until 2006," Paskah said.

"With that in mind, we hope that through this new effort to strengthen transparency, we will save between Rp 45 trillion (around US$5 billion) and Rp 90 trillion from the 2007 budget," he said.

Of the total Rp 763-trillion national budget for this year, Rp 504 trillion is allocated to the central government and the rest to local administrations, while about Rp 240 trillion of the total budget will be spent on the procurement of goods and services.

Also speaking during the launch of the new system, Corruption Eradication Commission chief Taufiqurrahman Ruki said that between 10 and 50 percent of the state procurement budget, depending on the government department involved, had been misappropriated in 2006.

"If we take the sum total of budget leakage from every administration, as well as state-owned enterprises, the figure could reach up to Rp 60 trillion in 2006," he said.

Ruki said that even though the new system would not be able to fully eradicate malfeasance in the procurement process, he was optimistic that it would significantly reduce it.

The publication of tender information, dubbed "e-announcement", is the first stage of a more extensive e-procurement program that will eventually involve all stages of procurement, starting with the official announcement and continuing through the bidding process right up to final payment, all carried out electronically through the Internet. The system is scheduled for full deployment next year.

E-announcements can be accessed on-line at www.pengadaannasional-bappenas.go.id, where users are supposed to be able to access an extensive list of government procurement projects for 2007, plus a list of blacklisted companies.

As of the time of writing, however, no lists had been uploaded onto the website.

However, Bappenas Director for Procurement Policy Development Agus Rahardjo said 11 central government institutions, nine provincial governments and 10 municipal administrations were ready to participate in the program.

"Some local administrations hesitated due to technological constraints, but that excuse is no longer acceptable now as Nanggroe Aceh Darussalam has stated its readiness," Agus said, referring to the fact that Aceh is one of the most technologically backward provinces in the country.

Agus also admitted that some national ministries were more prepared than others to participate in the program.

"I fully understand that some ministries have developed their own procurement programs and applications. But not to worry, we can simply adapt these to our system," Agus said.

The Public Works Ministry is one of the central government departments that is most prepared to participate in the program as it has been operating a basic e-procurement system since last year.

"We have succeeded in saving Rp 652 billion from our budget thanks to our semi e-procurement program," said Public Works Minister Djoko Kirmanto, who was also present at the launch.