Tuesday, December 14, 2004

Water company fined over foul bid

Source: Jakarta Post

The Jakarta Post, Jakarta

The Business Competition Supervisory Commission (KPPU) fined on Monday water operator PT Thames PAM Jaya (TPJ) Rp 1 billion (US$111,111) for colluding in a service tender late last year.

KPPU member Soy M. Pardede, who presided over the trial, said the commission also punished PT Interteknis Surya Terang (IST), which won the tender last year, by prohibiting it from participating in any tenders conducted by TPJ for two years.

He said TPJ and IST were guilty of violating Article 22 of Law No. 5/1999 on monopolies and healthy business competition by colluding to determine the outcome of the Rp 5 billion tender.

The incident began when TPJ held a tender to recruit some 307 security officers.

Soy said 16 companies submitted documents for prequalification for the tender. The tender committee later announced that only 12 of the companies, including PT Gardatama Nusantara, which lodged the complaint that led to the trial, fulfilled all the necessary requirements.

Thames PAM Jaya included IST in the next stage of the tender process even though it did not submit documents for prequalification.

"Such practices are against healthy business competition," Soy said when reading the ruling.

The KPPU also ordered TPJ to repeat the tender, without including IST. The commission also will monitor all of the company's future procurements to prevent a repeat of this incident.

IST lawyer Djuang Prastyanto said he would consult with his client before responding to the ruling. "But we may lodge an objection to the ruling."

Both TPJ and Gardatama refused to comment on the matter.

TPJ and IST have 14 days to respond to the verdict.

British-based TPJ has been a partner of city-run water operator PD PAM Jaya since 1998. It serves tap water consumers in eastern Jakarta.