World Bank asks Indonesia to return project loans due to corruption

Jakarta (Antara News) - Amidst the government`s serious efforts to combat corruption, the World Bank was reported to have cancelled, the first time in Indonesian history, its plan to provide funds for projects in Indonesia, and even asked for a return of project loans.

The request for a return of the project loans was prompted by corruption committed in the projects, World Bank Country Director to Indonesia, Andrew Steer, said in his letter of June 27, 2006 to Finance Minister Sri Mulyani Indrawati.

The amount of the fund Indonesia had to return reached US$4.7 million or equivalent to Rp42.3 billion, a release from the World Bank said here recently.

The fund which the World Bank has cancelled was supposed to finance transportation projects in Indoesia`s eastern regions estimated at 3.6 million US dollars, and a US$1.1 million grant for the preparation of a strategic highway insfrastructure project (SRIP).

In the two projects, the World Bank found three alleged corruption-related contracts, namely two in the transportation project (EIRTP) and another one in the SRIP project.

One of the World Bank`s findings concerned a bribe by a consultancy company to certain officials of the Public Work Ministry. "The value of alleged bribe reaches US$356,700 (about Rp3.2 billion)," he said.

The two problematic projects were already completed. For example, the transporation project in Indonesia`s eastern regions was completed on June 30, 2006, while the strategic highway infrastructure project on July 6, 2006.

Responding to the World Bank`s letter, Finance Minister Sri Mulyani called for an investigation into the two projects.

The minister has asked the Corruption Eradication Commission (KPK), the Financial Supervisory Board and the Public Works Ministry to take care of the administrative and legal process in addition to an audit to be conducted on the two projects.

"The minister hopes that the investigation of case could soon be completed," spokesman of the finance minister, Marwanto, said.

In the meantime, Secretary General of the Public Works Ministry Roestam Sjarief said on Monday that the case was under investigation of an inspectorate general team of the public works ministry together with the national audit agency (BPKP).

"I can not provide more information on the case till the completion of the investigation," he said. (*)
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