SOAS Research Online

Abstract

The Eastern Indonesia Region Transport Project (EIRTP-I), funded by the World Bank from 2001-2006, supports efforts to stimulate economic growth and improve social welfare in the 15 provinces and about 130 kabupaten (districts) and kotamadya (municipalities) of Eastern Indonesia through improving access to road transport facilities, reducing road transport costs, and facilitating efficient use of resources. EIRTP-I, which is the subject of this case study, is the first of two complementary and closely related transport projects. This project focuses on the preservation and development of national and other strategic road assets. It has three distinct components: the improvement of the condition of national and other strategic arterial roads; facilitation of an effective and sustainable decentralization of planning and management responsibilities for works on all primary roads (national, provincial and kabupaten) to the provincial and kabupaten governments; and increasing the efficiency, quality and transparency in awarding works, thereby improving the use of scarce financial and natural resources. US$200 million were committed by the World Bank to this project, which is carried out by the Directorate General of Regional Infrastructure (DGRI) within the Indonesian Ministry of Settlement and Regional Infrastructure (MSRI). The Directorate of Technical Affairs (BINTEK) in the DGRI is the lead implementing agency and executes the project through a Project Management Unit (PMU). The regional agencies (provinces) implement the project in the regions in accordance with the Government of Indonesia’s (GoI) regulations on decentralization. The World Bank’s transport projects have been challenged by severe problems related to corruption, collusion and nepotism (KKN) in the past. However, this is a sector in which the World Bank will invest heavily in the future both in Indonesia and worldwide. As more funds will be dedicated to transport projects in Indonesia by the World Bank, an increased focus on anti-corruption measures and monitoring efforts in transport projects is likely in the future. Furthermore, in the context of Indonesia’s massive decentralization and its impacts on infrastructure projects due to the mushrooming of new local regulations (perda, or peraturan daerah) in the form of taxes and levies, power struggles between different government layers, legal uncertainties and the emergence of new interest groups on the ground, corruption-related risks are on the rise. Implemented at the provincial level, EIRTP-I has been exposed to the repercussions of the Indonesian decentralization process. An examination of EIRTP-I thus provides useful insights for other projects that will be implemented at the provincial or district level. Against this backdrop, EIRTP-I is an interesting case study of current measures to prevent and monitor KKN in World Bank transport projects and its analysis will point to possibilities for improvement of anti-corruption measures for future transport projects.