ICC Imposes Fines in The Case of The Tender for The Construction of The Electric Signalling System For The Double Track Railway Between Bogor – Cicurug.

Tuesday, September 26, 2023

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Jakarta (15/8) – The Indonesia Competition Commission (ICC) imposed a total fine of Rp10,973,000,000 (ten billion nine hundred seventy-three million rupiah) on PT Len Industri (Persero) and PT Len Railway Systems in Case Number 18/KPPU-L/2022 concerning Alleged Violation of Article 22 of Law Number 5 of 1999 related to the Procurement of Work for the Construction of Electric Signalling Systems for Double Track Railways in Bogor-Cicurug at the Work Unit of the West Java Region Railway Engineering Centre of the Ministry of Transportation for the 2019-2021 Budget Year. The fines were read out in the verdict reading session held on Tuesday, August 15, 2023, at the ICC Office in Jakarta by the Commission Panel consisting of Yudi Hidayat, S.E. M.Si as Chairman of the Commission Panel, with Members of the Commission Panel consisting of Harry Agustanto, S.H., M.H., and Dr. Guntur Syahputra Saragih, M.S.M.

This case originated from a public report regarding the procurement of the construction of an electric signalling system for the Bogor-Cicurug double-track railway in 2019–2021. There are six reported parties in the case, namely:

  1. PT Len Industri (Persero) (Reported Party I),
  2. PT Len Railway Systems (Reported Party II),
  3. PT Christalenta Pratama (Reported Party III),
  4. PT Pindad Global Sources and Trading (Reported Party IV),
  5. Working Group for the Selection of Goods and Services Providers for the Work Package of the Work Unit of the West Java Region Railway Engineering Centre for West Java Region of the Directorate General of Railways at the Bureau of Procurement Services and Management of State Property of the Secretariat General Ministry of Transportation Fiscal Year 2019 (Reported Party V) and
  6. David Sudjito, S.T. Commitment Making Officer (PPK) Development Activities Development Activities for the Bogor-Sukabumi – Padalarang Region of West Java, West Section of the Western Section, Directorate General of Railways, Ministry of Transportation of the Republic of Indonesia (Reported Party VI) Transportation of the Republic of Indonesia (Reported Party VI)

In this procurement worth around Rp 301 billion, the Reported Party I and the Reported Party II made an operating partnership under the name Joint Operation Railway Industry and won the tender. The law enforcement process continued until the preliminary examination panel session on January 17, 2023. At the Further Examination stage, the Commission Panel found that there was no cooperation between two or more parties who openly or secretly adjusted documents with other tenderers or compared documents before submission so as to create false competition. However, the Panel of Commission is of the opinion that the failure to clarify by the Reported Party V on the unequal prices of several unit prices compared to the cost estimating unit prices, as well as the similarity of the unit prices of the Joint Operation bids of the Reported Party I and the Reported Party II with the cost estimating unit prices, followed up by the action of the Reported Party VI by not reviewing the provider selection report from the Selection Working Group/Procurement Officer, is evidence of conspiracy.

Considering various facts, assessments, analyses, and conclusions, the Commission Panel finally decided that Reported Party I, Reported Party II, Reported Party V, and Reported Party VI were legally and convincingly proven to violate Article 22 of Law Number 5 Year 1999 and imposed sanctions in the form of fines to Reported Party I amounting to Rp 6,058,000,000 (six billion fifty-eight million rupiah) and Rp 4,915,000,000 (four billion nine hundred fifteen million rupiah) to Reported Party II. Both reported parties are required to make payment of fines no later than 30 (thirty) days after this decision becomes legally binding (inkracht). If submitting an objection, the reported party is obliged to submit a bank guarantee of 20% (twenty percent) of the value of the fine to ICC no later than 14 (fourteen) working days after receiving notification of the decision.

In addition, the Commission Panel also recommends that the Commission provide advice and consideration to the personnel supervisory officials at the authorized Ministry of Transportation agency where the personnel of the respondent are located. Ministry of Transportation with the authority to impose disciplinary sanctions on the personnel of Reported Party V and Reported Party VI because they have deliberately not carried out their duties and obligations in accordance with the regulations. their duties and obligations in accordance with applicable regulations as the Selection Working Group or tender organizer for Reported Party V, as the tender organizer for Reported Party V, and as a Commitment Making Officer for Reported Party VI. Reported Party VI in the process of preparing the decision, one of the members of the commission panel, namely Dr. Guntur Syahputra Saragih, M.S.M., has a different opinion (dissenting opinion) related to the evidence of the conspiracy between two or more parties and the adjustment of documents.