Bid rigging in road extension package of West and Central Java.

Monday, January 18, 2016

Indonesian competition authority, KPPU, announced its decision on Case No. 04/KPPU-L/2015 on Road Extension Package of Provincial Border Road at West Java-Patimuan-Sidareja, and Road Extension Package of Sidareja-Jeruk Legi in Central Java in 2013. The decision read on Monday, 18 January 2016 in Yogyakarta, Central Java Province.

The case hearing, led by Commissioner Sukarmi and assisted by Commissioner Kamser Lumbanradja and Commissioner Chandra Setiawan, brought the case from complaint on 5 (five) companies and the bid committee that suspected for entering a tender conspiracy (Article 22 of Law No. 5/1999) to win certain companies. The reported companies are as follows: PT Melista Karya (MK), PT Panca Darma Puspawira (PDP), PT Agung Darma Intra (ADI), PT Cahaya Sempurna Sejati (CSS) dan PT Bumi Redjo (BR).

KPPU found several facts during the hearing on the horizontal collusion between MK, ADI, CSS, and BR. They proved to make a deal to share the projects. In such deals, it said that they would share the package of road extension for Provincial Border Road of West Java-Patimuan-Sidareja to ADI as the leader, and CSS as the member. While on Sidareja-Jeruk Legi road extension, they agreed to appoint MK as their leader, and BR as their member. Even-though the agreement was not executed, but the Commission Council certain that this agreement is continued to exist and in-line with the result of tender announcement, along with an evidence of bid offer customization to set a winner to the dedicated package.

In addition to horizontal collusion, KPPU also found the existence of vertical collusion performed by the bid committee to facilitate MK, PDP, and ADI as the bid winner for each package. Based on such evidences, KPPU Commission Council sanctioned MK to pay fine amounting IDR 1.6 billion, PDP for IDR 1.6 billion, ADI for IDR 1.6 billion, and CSS for IDR 367 million. KPPU also prohibits BR to join other bidding on the road development by Ministry of Public Work in the Central Java Office for two years following the affirmation of KPPU’s decision.