When Cutting Corners Doesn't Pay

A MEETING of the board of directors of state-run electricity company PLN held in the second half 2011 was marked by worries over the possible failure to construct 21 power relay stations for the Java-Bali and Nusa Tenggara electricity grids. One director reported to Dahlan Iskan as the project leader that if the relay station material procurement bidding process was not completed that year, the target would likely be delayed by four to five years. If this happened, it would be nearly assured that an electricity crisis would be unavoidable. Rolling blackouts on the country's most populated islands would be almost inevitable.

The problem was, according to Finance Minister Regulation No. 194/2011, the tender process could only start if the land for the project had been secured. At that time, most of the land had not yet been purchased. All of those attending the meeting understood that if they broke the rules they might face legal risks in the future. "If I have to be arrested, just arrest me," said one senior PLN official who attended that meeting, quoting Dahlan.

June 16, 2015