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KPPU IMPOSES TOTAL PENALTIES OF 28 BILLION IN BID RIGGING CASE FOR REVITALIZATION OF ISMAIL MARZUKI PARK (TIM)

2023, Indonesia, Abuse of Dominance

Jakarta (18/7) - The Indonesia Competition Commission (KPPU) decided that PT Jakarta Propertindo (Perseroda), PT Pembangunan Perumahan (Persero) Tbk, and PT Jaya Konstruksi Manggala Pratama Tbk were proven guilty in Case Number 17/KPPU-L/2022 concerning Alleged Violation of Article 22 of Law Number 5 of 1999 related to the Procurement of Works for the Jakarta Arts Center Revitalization Project Taman Ismail Marzuki (TIM) Phase III. For the violations committed, the Commission Panel imposed a fine of IDR 16,800,000,000 (sixteen billion eight hundred million rupiah) to PT Pembangunan Perumahan (Persero) Tbk, and IDR 11,200,000,000 (eleven billion two hundred million rupiah) to PT Jaya Konstruksi Manggala Pratama Tbk. The verdict was read out today, July 18, 2023 at the KPPU Head Office in Jakarta.

For information, the case originating from a public report is related to the alleged tender conspiracy in the Revitalization of the Jakarta Arts Center Taman Ismail Marzuki Phase III (interior work). This case involves 3 (three) Reported Parties, namely the tender implementer PT Jakarta Propertindo (Perseroda) (Reported Party I), PT Pembangunan Perumahan (Persero) Tbk (Reported Party II), and PT Jaya Konstruksi Manggala Pratama Tbk (Reported Party III). Reported Party II and Reported Party III participated in the tender as an operational cooperation or consortium (KSO) PP-JAKON. This case progressed to the Examination process by the Commission Panel. Acting as the Chairman of the Commission Panel for this case, Dr. Drs. Chandra Setiawan, M.M., Ph.D, and accompanied by Members of the Commission Panel, Dr. M. Afif Hasbullah, S.H., M.Hum. and Harry Agustanto, S.H., M.H.

In the trial process, various elements of conspiracy carried out by the Reported Parties were revealed, among others:

  1. The action of the Reported Party I which canceled the tender without being based on a valid and accountable justification, proves that the cancellation of the tender was deliberately carried out by the Reported Party I as a form of action to facilitate the Reported Party II and Reported Party III (KSO) to become the winner of the a quo tender.
  2. The action of the Reported Party I in providing an exclusive opportunity to the Reported Party II and the Reported Party III (KSO) in the Technical Evaluation by requesting the HR and General Director's exposure to the technical evaluation results to the Construction Management Consultant, which was then followed up with the fact of tender cancellation and changes in the assessment procedures in the re-tender, proved the exclusivity of the Reported Party I in facilitating the Reported Party II and the Reported Party III (KSO) to become the winner of the a quo tender. This is confirmed by the changes in the assessment procedures, the technical evaluation scores obtained by the Reported Party II and the Reported Party III (KSO) in the re-tender increased significantly enough to obtain a high percentage of technical evaluation scores.
  3. The actions of the Reported Party II and the Reported Party III (KSO) made document adjustments both overtly and secretly. Although the facts of the trial did not reveal any form of direct communication between the Reported Party I and the Reported Party II and the Reported Party III (KSO), however, there are facts of a series of processes that show the efforts of the Reported Party I to facilitate the Reported Party II and the Reported Party III (KSO) through the actions of the Director of Human Resources and General Affairs who intervened in the Procurement Team when the tender process was still running. Then followed up with the cancellation of the tender without being based on legitimate and accountable justification.

Based on the above description, the Commission Panel decided that the Reported Party I, Reported Party II, and Reported Party III were legally and convincingly proven to violate Article 22 of Law Number 5 Year 1999, and imposed a fine of IDR 16,800,000,000 (sixteen billion eight hundred million rupiah) to the Reported Party II, and IDR 11,200,000,000 (eleven billion two hundred million rupiah) to the Reported Party III. The Commission Panel in its Decision also gave orders to the Reported Party I, as follows:

  1. To refrain from taking discriminatory actions and/or any form of conspiracy to arrange or determine the winner of future tenders since the Reported Party receives notification of the KPPU Decision.
  2. To eliminate the substance and/or clauses that have the same meaning as Clauses 38.2 and 38.3 of the Request for Proposal (RfP) document of the case a quo, in every procurement organized by the Reported Party since the Reported Party received notification of the KPPU Decision.
  3. To report and/or submit Request for Proposal (RfP) documents upon completion of the procurement process organized by the Reported Party I for 2 (two) years since the Reported Party received notification of the KPPU Decision.

Furthermore, the Commission Panel also ordered all of the Reported Parties to implement the Decision no later than 30 (thirty) days after the Decision becomes legally binding (inkracht). As well as, ordering the Reported Party II and the Reported Party III to submit a bank guarantee of 20% (twenty percent) of the value of the fine to KPPU no later than 14 (fourteen) days after receiving notification of this Decision, if they file an objection legal effort.