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Transcript of Pres Decree PPP
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The Presidential Decree regarding Partnership of Government with Business Entity
in the Provisioning of Infrastructure
(Presidential decree No. 67 Year 2005 , Revised by Presidential Decree No. 13 year
2010)
CHAPTER I
GENERAL STIPULATION
Article 1
1. Minister / Head of Institution / agency are the leader of ministry /
institution whose his / her scope, task and responsibility include the
infrastructure sector which regulated in this Presidential Decree
2. Head of region are governor for provincial region, or bupati for kabupaten
region, or mayor for municipal region
3. The provisioning of infrastructure are activities which include construction
work to build or improve infrastructures capability and/or infrastructure
management activity and/or infrastructure maintenance in frame work of
improving infrastructures benefit.
4. Business entity are private business entity in form of incorporated
company, State Owned Business Entity (BUMN), Regional Owned
Business Entity (BUMD), and cooperation.
5. Partnership project are Infrastructure Provisioning which conducted
through Partnership Agreement or undertaking permit granting betweenMinister / Head of Institution/agency / Head of Region with Business Entity.
6. Partnership agreement is written agreement for provisioning of
infrastructure between Minister / Head of Institution/agency / Head of
Region with Business Entity which established through general
auction/tender
7. Undertaking Permit is permit for Infrastructure Provisioning which given by
Minister / Head of Institution/agency / Head of Region to the Business
Entity which is established through general auction/tender.
8. *) Government support is fiscal or non fiscal contribution given by Minister
/ Head of Institution/agency / Head of Region and / or Minister of Finance
according to each authority based on regulatory law in framework of
improving financial viability of partnership project.
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9. *) Government guarantee is financial compensation and/or other form of
compensation given by Ministry of Finance to the Business Entity through
risk sharing scheme for partnership project
CHAPTER II
GOAL, TYPE, FORM AND PRINCIPLE OF PARTNERSHIP
Article 2
(1) Minister / Head of Institution/agency / Head of Region can conduct
partnership with Business Entity in Infrastructure Provisioning
(2) In conducting the partnership as meant in sub-clause (1). Minister / Head
of Institution/agency / Head of Region acted as the one that responsiblefor Partnership Project.
(3) *) In case that the regulatory law regarding pertinent infrastructure
sector stated that Infrastructure Provisioning by Government is conducted
or carried out by State Owned Business Entity / Region Owned Business
Entity , then the pertinent State Owned Business Entity / Region Owned
Business Entity acted as the one that responsible for Partnership Project
(4) *) Stipulation which regulate task and authority of Minister / Head of
Institution/agency / Head of Region in this Presidential Decree, is also
valid for State Owned Business Entity/Region Owned Business Entity asmeant in sub clause (3), except for the task and authority of Minister /
Head of Institution/agency / Head of Region which is public in nature
which cannot be transferred
Article 3
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Partnership project of Infrastructure Provision between Minister / Head of
Institution/agency / Head of Region with Business Entity is conducted with
goals :
a. To fulfill the funding necessity continually in Infrastructure Provisionthrough exertion of private fund
b. To improve the quantity, quality and efficiency of service through healthy
competition
c. To improve the quality of management and maintenance in Infrastructure
provision ;
d. To stimulate the usage of user pays the received service principle, or in
certain instance consider the users affordability to pay
Article 4
(1) Types of infrastructures which can be done in partnership with Business
Entity include:
a. *) Transportation Infrastructure, include airport management service,
provision and / or management service of seaport, railway means and
infrastructure
b. Road infrastructure, include toll road and toll bridge
c. Water resource infrastructure, include canal to bring raw water
d. Drinking water infrastructure which include raw water intake building,
transmission network, distribution network, drinking water treatment
installation
e. Sewerage infrastructure which include sewage treatment installation,
collecting network and main network, and solid waste means which
include transport and dumping site.
f. *) Telecommunication infrastructure and informatics, includingtelecommunication network and e-government infrastructure
g. *) Electricity resource infrastructure, including power generators,
include the development of electric power which comes from
geothermal , transmission and distribution of electric power.
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h. *) Oil and gas infrastructure, include transmission and/or distribution of
oil and gas
(2) Infrastructure as meant in sub clause (1), is being done as partnership on
according to regulatory laws hold in the pertinent sector
Article 5
(1) The partnership of Minister / Head of Institution/agency / Head of Region
with business entity in infrastructure provisioning as meant in Article 2
sub-clause (1), can be conducted through :
a. Partnership agreement; or
b. Undertaking Permit
(2) The form of partnership of Minister / Head of Institution/agency / Head of
Region with business entity in infrastructure provision, is established
based on agreement between Minister / Head of Institution/agency / Head
of Region with business entity as long as it doesnt contradictive with the
current regulatory law.
Article 6
The infrastructure provision partnership between Minister / Head of
Institution/agency / Head of Region with Business Entity is conducted based
on following principles :
a. Just, it means all business entity that participated in
procurement process must get the same treatment
b. Open, it means all procurement process has open characteristic
for Business entity that fulfill the required qualification
c. Transparent, it means all stipulation and information relatedwith Infrastructure Provision include the technical requirement of
selection administration, evaluation procedure, and establishment of
Business Entity are open in nature for all Business Entity and general
public,
d. Competitive, it means the selection of Business Entity is through
tender process;
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e. Accountability, it means the result of Business Entity selection
must be able to be accountable.
f. Mutual benefit , it means partnership with Business entity in
Infrastructure provision is being done based on equal stipulation and
requirement so as to give the benefit for both parties and communityby calculating the basic need of community;
g. Mutual need, it means the partnership with business entity in
provision of infrastructure is being done based on stipulation and
requirement that consider the need of both parties
h. Mutual support , it means the partnership with business entity
in provision of infrastructure is being done with spirit to fill each other
of both parties.
CHAPTER III
IDENTFICATION AND ESTABLISHMENT OF PROJECT WHICH IS
CONDUCTED BASED ON PARTNERSHIP AGREEMENT
Article 7
(1) Minister / Head of Institution/agency / Head of Region conduct
identification of Infrastructure Provision Projects which will be made as
partnership with Business Entity, with considering at least:
a. The conformity with national / regional mid term development plan and
infrastructure sector strategic plan
b. The conformity of project location with the Areas Spatial Structuring
Plan;
c. Interrelatedness among infrastructure sectors and among regions
d. Analysis of social cost and benefit
(2) Each project proposal which are going to be made as partnership must
be embedded with:
a. Pre feasibility study
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b. The plan of partnership form
c. Plan of project financing and source of fund
d. Plan for partnership overture which include schedule, process and
method of appraisal
Article 8
In conducting identification of project that will be made as partnership as
meant in Article 7, the Minister / Head of Institution/agency / Head of Region
conduct public consultation
Article 9
(1) Based on result of identification as meant in Article 7 and result of public
consultation as meant in Article 8, the Minister / Head of
Institution/agency / Head of Region establish the priority of projects that
will go into partnership in list of project priorities.
(2) List of project priorities as meant in sub-clause (1) , is stated as open for
public and being distributed to the community
CHAPTER IV
PARTNERSHIP PROJECT ON INITIATIVE OF BUSINESS ENTITY
Article 10
*) The business entity can propose the initiative of Partnership Project of
Infrastructure Provision to The Minister / Head of Institution/agency / Head
of Region with following criteria :
a. Does not included in the master plan of pertinent sector
b. Technically integrated to the master plan of pertinent sector
c. Economically and financially viable
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d. Does not require government support in form of fiscal contribution
Article 11
(1) The project of Business Entitys Initiative must be accompanied with :
a. Feasibility Study
b. Plan of partnership form
c. Plan of project financing and its source of fund; and
d. Plan of partnership overture which include schedule, process and
method of appraisal
(2) Project on Business Entity Initiative as meant in sub-clause (1), is
considering also the stipulation as meant in Article 7 sub-clause (1)
Article 12
(1) The Minister / Head of Institution/agency / Head of Region evaluates the
project on Business Entitys initiative as meant in article 11
(2) In case that based on the evaluation as meant in the above sub-clause
(1) the project on business entitys initiative fulfill the viability
requirement, the project on the Business Entitys initiative is processed
through general tender/auction according to the stipulation in this
Presidential Decree
Article 13
(1) *) Business entity which acted as Partnership Project Initiator and alreadyapproved by Minister / Head of Institution/agency / Head of Region , willbe compensated
(2) *) The compensation as meant in sub-clause (1), can take form of:
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a. Awarding of additional value, or
b. Awarding the right to make bid by initiator Business Entity to the bestbidder (right to match) according to valuation result in the auction /tender process; or
c. Buying of Partnership Project Initiative including the embeddedintellectual property right by Minister / Head of Institution/agency /Head of Region of by the auction winner.
(3) *) Awarding of compensation forms as meant in sub clause (2) will bementioned in the Minister / Head of Institution/agency / Head of Regionsapproval
(4) *) The initiator of Partnership project who already get the approval ofMinister / Head of Institution/agency / Head of Region as meant in sub-clause (2) letter a and b still must follow the bidding as required ingeneral auction document
(5) *) The initiator of Partnership project who already get the approval ofMinister / Head of Institution/agency / Head of Region as meant in sub-clause (2) letter c cannot follow the bidding as required in general auctiondocument.
Article 14
(1) *) Awarding of additional value as meant in Article 13, sub-clause (2)
letter a, is as of 10% at the highest from initiators tender valuation and
should be mentioned clearly in the auction document
(2) *) The amount of cost which already spent by initiator business entity as
meant in Article 13 sub-clause (2) letter c is established by Minister / Head
of Institution/agency / Head of Region based on appraisal conducted by
independent evaluator appointed by Minister / Head of Institution/agency /
Head of Region
(3) *) The Buying of Partnership Project Initiative as meant in Article 13 sub-
clause (2) letter c, constitute the replacement by Minister / Head of
Institution/agency / Head of Region or by the tender winner on amount of
direct cost which related to the preparation of partnership project whichalready spent by initiator business entity.
(4) *) The Awarding of the right to make the bidding change (right to match)
to the initiator business entity as meant in Article 13 sub-clause (2) letter
b constitute awarding of right to initiator of partnership project business
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entity to make bidding change if based on the result of tender there are
other business entity who give the better bid
(5) *) Time period for initiator business entity to put forth right to make
bidding change as meant in sub-clause (4) is as of 30 (thirty) days at the
longest since the establishment of the best bidder of the general auctionof partnership project which established based on valuation criteria from
pertinent sector
CHAPTER V
INITIAL TARIFF AND TARIFF ADJUSTMENT
Article 15
(1) The initial tariff and its adjustment is periodically established to ensurethe level of investment return which include coverage of capital cost,
operational cost and reasonable profit in certain time period.
(2) In case that establishment of initial tariff and its adjustment cannot be
done according to stipulation as meant in sub-clause (1), the tariff is
established based on the level of users affordability
(3) In case that tariff is established based on the level of users affordability
as meant in sub-clause (2), The Minister/ Head of Institution/agency / Head
of Region give compensation so that the reasonable level of investment
return and profit can be obtained.
(4) The amount of compensation as meant in sub-clause (3) , based on
obtained competition results among the auction participant and is chosen
based on bid of lowest amount of compensation
(5) The compensation only being given to Infrastructure Provision Partnership
Project which have the social interest and benefit, after The Minister/ Head
of Institution/agency / Head of Region making complete and
comprehensive study on the social benefit
CHAPTER VI
RISK MANAGEMENT *)
Article 16
(1) The risk is managed based on risk allocation principle between Minister/
Head of Institution/agency / Head of Region and Business Entity by
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allocating the risk to party which most capable to control the risk in
framework of making guarantee of efficiency and effectiveness in
Infrastructure Provision
(2) Risk management as meant in sub-clause (1), is stated in Partnership
Agreement
CHAPTER VI A *)
GOVERNMENT SUPPORT AND GOVERNMENT GUARANTEE
Article 17 A *)
(1) Minister/ Head of Institution/agency / Head of Region can give
Government Support to Partnership Project according scope of activity of
Partnership Project *)
(2) Government support in form of fiscal contribution must be mentioned in
States Revenue and Spending Budget and / or Regionals Revenue and
Spending Budget *)
(3) Government Support in form of permit, land procurement, support of part
of construction, and / or other form according to effective regulatory law is
established by Minister/ Head of Institution/agency / Head of Region *)
(4) Minister of finance can approve Government Support awarding in form of
tax incentive based on Minister/ Head of Institution/agency / Head of
Regions proposal *)
(5) Government support must be mentioned in general auction document *)
(6) Land procurement as meant in sub-clause (3) is conducted by Minister/
Head of Institution/agency / Head of Region before the process of Business
Entity procurement *)
(7) In case that partnership project is financially feasible, the auction winner
business entity can pat back the land procurement cost which had been
made by Minister/ Head of Institution/agency / Head of Region as meant in
sub-clause (6) either in part or as a whole, and that must be mentioned in
general auction document *)
(8) The stipulation as meant in sub-clause (6) and sub-clause (7) is being
done if it does not contradictive to the effective regulatory law in the
pertinent sector *)
(9) Other than government support as meant in sub-clause (3). The
Government can provide government guarantee to partnership project *)
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Article 17B *)
(1) The Government guarantee is being given by addressing principle of
financial risk management and control in States Revenue and Spending
Budget *)
(2) Control and management of risk on government guarantee as meant in
sub-clause (1) is conducted by Minister of Finance *)
(3) In implementing the task and function as meant in sub-clause (2), Minister
of Finance is having the authority to : *)
a. To establish the criteria of government guarantee awarding which will
be given to partnership project
b. To request and obtain the data and information needed from parties
related with partnership project which are being proposed to getGovernment Guarantee
c. To approve or reject the proposal of Government Guarantee Awarding
to Business entity in framework infrastructure provision
d. To establish form or type of government guarantee which being given
to a partnership project
(4) The government guarantee to Business entity must be mentioned in
general auction document *)
(5) Further stipulation regarding form, type, and procedure of Governmentguarantee awarding are regulated with Minister of Finances decree. *)
Article 17C *)
(1) The government guarantee in form of financial compensation can be
given by Minister of Finance through business entity that specially formed
by government for the purpose of infrastructure guarantee *)
(2) The stipulation regarding governments guarantee awarding as meant in
sub-clause (1), is further regulated by separate Presidential Decree *)
CHAPTER VII
THE PROCEDURE OF BUSINESS ENTITY PROCUREMENT
IN FRAMEWORK OF PARTNERSHIP AGREEMENT
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Article 18
The Procurement of Business Entity in framework of Partnership Agreement is
implemented through general auction.
Article 19
Minister/ Head of Institution/agency / Head of Region make the procurement
committee.
Article 20 *)
The procurement procedure as meant in Article 18, include *)
a. Procurement plan
b. Procurement implementation
Article 21
Minister/ Head of Institution/agency / Head of Region establish the auctionwinner based on proposal from procurement committee
Article 22
The Stipulation as meant in Article 18, 19,20 and 21 are further regulated in
appendix of this Presidential decree, which constitute inseparable part of this
presidential decree
CHAPTER VIII
PARTNERSHIP AGREEMENT
Article 23
(1) The partnership agreement at least contains stipulation regarding
a. Scope of work
b. Duration of time
c. Guarantee of implementation
d. Tariff and its adjustment mechanism
e. Right and obligation, include risk allocation
f. Service performance standard
g. Transfer of shares before partnership Project operated commerciallyh. Sanction in case the parties do not fulfill the stipulation of agreement
i. Cut off or termination agreement
j. The financial report of business entity in frame work of agreements
implementation, which are examined yearly by independent auditor
and its announcement in national printed media of national scale
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k. Mechanism of dispute settlement which are regulated in stages,
namely consultative, mediation, arbitration/court
l. Performance monitoring mechanism on business entity in the
implementation of procurement
m. The usage and ownership of infrastructures asset
n. Return of infrastructures asset and / or its management to Minister/Head of Institution/agency / Head of Region
o. Force majeure
p. Statement and guarantee of parties that partnership agreement is
legally binding the parties and already conform with current regulatory
law
q. Usage of Indonesian Language in partnership agreement . If the
partnership agreement is signed in more that one language, the one
that is valid is the one use Indonesian Language
r. The effective law, namely Indonesian law.
(2) In case that Infrastructure provision is implemented by conducting land
acquisition by Business Entity , the amount of implementation guarantee
as meant in sub-clause (1), letter c, can be determined with calculating
cost which already spent by Business Entity for pertinent land acquisition.
(3) Partnership agreement clearly mention the status of asset ownership
which acquired during duration period of agreement
(4) The transfer of share of the Business Entity holding the partnership
agreement before infrastructure provision operated commercially as
meant in sub-clause (1) letter g, can only be done after getting the
approval and based on criteria established by Minister/ Head of
Institution/agency / Head of Region with stipulation that the transfer of
share does not postpone the schedule of operation starting of thepartnership project.
Article 24
(1) In the period of 12 month at the longest after the business entity signing
the partnership program, the business entity must already obtain the
financing on partnership project
(1a) The obtained financing as meant in sub-clause (1) is declared as being
already implemented if :
a. Loan agreement has already signed to finance whole partnership
projectb. Part of loan as meant in letter a has already able to be converted into
cash to start the construction work
(1b) The time period as meant in sub-clause (1) can be lengthen by Minister/
Head of Institution/agency / Head of Region as long as 12 month at the
longest , if the failure to obtain financing is not caused by business
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entitys negligence according to criteria established by Minister/ Head of
Institution/agency / Head of Region
(2) In case the time period as meant in sub-clause (1) or
lengthening time as meant in sub-clause (1b) cannot be fulfilled by
Business Entity then the partnership agreement is terminated and
implementation guarantee is can be drawn by Minister/ Head ofInstitution/agency / Head of Region
Article 25
(1) In case there are submission of assets owned or controlled by Minister/
Head of Institution/agency / Head of Region to business entity for
implementation of partnership project, in the partnership agreement
must be arranged :
a. The purpose of asset usage and prohibition to use the asset for the
purpose other than the one that has already agreed upon.b. Responsibility of operation and maintenance include tax payment and
other obligation which arose as consequences of the assets usage
c. Right and obligation of party who controlled the asset to supervise and
maintain the performance of the asset during its usage
d. Prohibition for Business entity to guaranteed the asset as a collateral
to third party
e. Procedure of submission and/or return of asset
(2) In case the partnership agreement arrange the submission of asset
control that is conducted during the period of agreement, the partnership
agreement should regulate :
a. The condition of asset to be transferred
b. The procedure of transferring the asset
c. The assets status that should be free from all of property guarantee or
charge of any form at the moment when the asset is submitted to the
Minister/ Head of Institution/agency / Head of Region;
d. The assets status that is free from third partys claim
e. The release of Minister/ Head of Institution/agency / Head of Region
from all claim that arise after submission of asset
f. The compensation to business entity who release the asset
Article 26
In the connection with the usage of intellectual property rights, The
Partnership agreement should contain the guarantee from the business
entity that:
a. The intellectual property right used is fully freed from all kind of law
violation
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b. Minister/ Head of Institution/agency / Head of Region will be freed from
all sue or claim from any third party in relation with the usage of
intellectual property right in provision of infrastructure
c. While the settlement of case still on going because of the presence of
sue or claim as meant in letter b then:
1) The provision of infrastructure still can be implemented2) To work out the license so that the usage of intellectual property
right still can be continued
CHAPTER IX
PROVISION OF INFRASTRUCTURE BASED ON THE UNDERTAKING
PERMIT
Article 27
The procurement of business entity in provision of infrastructure which isbased on Undertaking Permit is conducted through permit auction
Article 28
The procedure of permit auction as meant in Article 27, is further
regulated by Minister/ Head of Institution/agency / Head of Region, by
application of principle as meant in Article 6
CHAPTER X
TRANSITIONAL STIPULATION
Article 29
1. By the validityof this Presidential decree :
a. The Partnership agreement already signed before the
effectiveness of this Presidential decree is still effective
b. The business entity procurement process which is still
conducted and whose the winner is has not yet established then
The business entity procurement process is later to be conducted
in accordance this Presidential Decree
c. The business entity procurement process which has been
conducted and whose the winner has been established, but Thepartnership agreement has not been signed then the Partnership
agreement is made according to this Presidential Decree
d. The Partnership agreement which already been signed but the
financing fulfillment has net boon attained in accordance with the
time period stipulated in partnership agreement then the
stipulation on fulfillment of financing obligation is carried out
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according to this presidential decree after Minister/ Head of
Institution/agency / Head of Region make evaluation to the business
entity and partnership project based on criteria established by
Minister/ Head of Institution/agency / Head of Region
e. The partnership agreement which already been signed but the
land acquisition has not been finished yet, then the land acquisitionprocess will be adjusted according to this Presidential Decree, and
Minister/ Head of Institution/agency / Head of Region can make
adjustment on partnership agreement after conducting evaluation
to the business entity and partnership project with criteria
stipulated by Minister/ Head of Institution/agency / Head of Region
f. The transfer of share before the partnership project operated
commercially which already made before the .. of this presidential
decree is stated as legal and effective
2. This presidential decree is effective started from the date it is
stipulated
The *) mark refer to Presidential Decree No. 13 year 2010
APPENDIX TO THE PRESIDENTIAL DECREE NO. 13 YEAR 2010
THE PROCEDURE OF BUSINESS ENTITY PROCUREMENT IN FRAMEWORK OF
PARTNERSHIP AGREEMENT
1. Procurement Plan
1. Minister/ Head of Institution/agency / Head of Region establish the
procurement committee
2. Member of procurement committee consist of elements which
comprehend :
a. Procurement procedure
b. Substance of pertinent work/activity
c. Agreements Law
d. Technical aspect
e. Financial aspect
3. Schedule of procurement implementation: the making of procurement
administration schedule should give enough time allocation for allstage of procurement process
4. Own Calculation Price should be done correctly
5. The document of general auction at least should contain:
a. invitation to all auction participants
b. instruction to all auction participant at least contain :
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1) general: scope of work, source of financing, requirements and
qualification of auction participants, number of tender document
submitted, the review of work location
2) the contents of general tender document, explanation of
contents of general tender document, and changes of contents
of general auction document3) language requirement used in tender, the writing of offered
price, offered currency, and the way of payment, the validity of
offer, the offers letter of guarantee, proposal of bid alternative
by auction participants, type of bid, and signature of bids letter
4) the way to enveloped and marking the bids envelope, time
limit of the bid delivery, the treatment to the late bid, prohibition
to change and withdraw of the already submitted bid
5) Bid opening procedure, secrecy and prohibition, clarification of
the bid document, examination on the bid documents
completeness, aritmethics correction, conversion to single
currency, the bids evaluation system include criteria,
formulation and procedure of evaluation, as well as price
preference appraisal
c. Design of partnership agreement
d. List of quantity and price
e. Drawing and technical specification
f. Type of bid letter
g. Type partnership
h. Type of bid collateral letter
i. Type of implementation collateral letter
j. In general auction document the method of bid document deliveryshould be explained
2. Procurement implementation
1. Announcement and Registration of participant
a. The procurement committee must announce extensively regarding
the existence of General Auction
b. The content of announcement is at least contains name and
address of Minister/ Head of Institution/agency / Head of Region
which are going to conduct general auction, short description
regarding the work to be done, estimate of the works value,
requirement of auction participants, place, date, day, and time totake the general auction document.
c. In order for the announcement as meant in letter a can reach the
target widely, efficient and timely according to the extent of the
targeted community and business person, the announcement is
arranged as follows:
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The announcement of auction / prequalification is using newspaper
and regional governments / private radio broadcast which having
the reach of national/international reader and listener
2. The prequalification include the appraisal on:
a. Business permit letter on its business sector
b. The authority to sign the contract legallyc. The companys legal status, meant that the company are not under
supervision of court, not bankrupt, the business activity are not
being cancelled, and / or not undergo criminal sanction
d. Experience in similar Partnership project of infrastructure provision
e. The capability to provide facilities, equipment and personnel
f. Audited financial statements which include last three book year
g. Letter of Financial support from bank
h. Availability of special equipment, needed special experts or certain
experience for special work / high technology
3. Prequalification procedure
a. Prequalification announcement for general auction
b. Registration and taking of prequalification document
c. Delivery of prequalification document by auction participants
d. Evaluation and clarification of prequalification document
e. The establishment of list of the auction participant who pass the
prequalification by procurement committee
f. Legalization of prequalification result by Prequalification
committee
g. Announcement Prequalification Result
h. The objection submitted by the auction participant which does
not pass the prequalification to Minister/ Head ofInstitution/agency / Head of Region, if any
i. Examination and follow up on refutation to the prequalification
result
j. Re evaluation by procurement committee if the
refutation/objection of material / service provider is proven to be
right and announcement of re evaluation results
k. If the auction participant which passing the prequalification are
less than 3 then the repeat announcement and repeat
prequalification process is made by inviting the new participant.
l. If after the auction announcement / prequalification is repeated,there are no new additional candidate of auction participant or all
the auction participant are still less than 3, then Procurement
committee continue the general auction process.
4. Forming of participant list, delivery of Invitation and taking of
general auction document
a. The list of participant which are going to be invited must be
legalized by Minister/ Head of Institution/agency / Head of Region
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b. All the candidate of auction participant listed in the list of auction
participant must be invited to take the document of general auction
c. The invited auction participant has the right to take the general
auction document from Procurement Committee
5. The Auction Explanation
a. The auction explanation is being made in determined place and thetime, attended by the auction participants listed on the list of
auction participants
b. The absence of the auction participant on the time of auction
explanation cannot be made as base to reject / abort The auction
participant
c. In the agenda of general auction explanation, the things must be
explained to participants regarding :
1) Method of auction
2) Way to deliver the bid
3) The documents that must be attached in the bid document
4) Agenda of bid document opening
5) Evaluation method
6) Things that abort the bid
7) Form of partnership agreement
8) Stipulation and way of evaluation regarding the price preference
on usage of domestic production
9) The amount, validity and the party who can issue the bid
collateral
d. If deemed necessary the Procurement Committee can give further
explanation by way of making the field review
e. The delivery of explanation regarding the articles / Article ofgeneral auction document in form of question from the participant
and answer from procurement committee as well as other
information include its change and field review, must be written in
official report of explanation signed by Procurement Committee and
minimum of one representative from the attend participant, which
constitute inseparable part of general auction document.
f. If in the official report of explanation as meant in letter e there are
new things / stipulation or important changes that necessary to be
accommodate, then the procurement committee should put it in
addendum of general auction document6. Submitting and Opening of Bid Document
a. Method of bid document submitting using two envelope method,
namely envelope # 1 contains administration and technical bid
document, and envelope #2 contain financial bid document, then
the twos envelope are put into one enclosure envelope and is
submitted altogether to the Procurement Committee
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b. The method of submitting and the documents way of opening must
follow the stipulation required in general auction document
c. The method of submitting the bid document and time duration of
submitting the bid document must be explained in the occasion of
explanation delivery
d. The Procurement Committee stipulate place, date and time toreceive the bid document
e. The bid document must be submitted directly to the Procurement
Committee on the place, date and time stipulated
f. It is not allowed to change the closing time of bid document
delivery
g. At the end of time limit of bid document delivery , the Procurement
Committee open the meeting of bid document opening, declare in
front of the auction participant that the time to enter the bid
document is already closed according to the stipulated time, and
reject the late bid document and/or additional bid document,
afterward the committee open the entered bid document.
h. The opening of bid document
1) The procurement committee ask for the willingness of at least
two representative of attended auction participant as witness. If
there are no witness from the attended participant, the
Procurement Committee postpone the opening of box / place to
enter the bid document until certain time stipulated by
Procurement Committee. If until the stipulated time, the
representative of the auction participant still not attend, the
agenda of opening box/place to enter the bid document is held
with witnessed by 2 person outside the Procurement Committeethat were appointed in written by The Procurement Committee.
2) The Procurement committee examined the content of box /
place to enter the bid document and counting the number
entered bid envelope (the letter of resignation is not counted)
3) The opening of bid document is being held according to the
stipulation arranged in the auction document
4) The procurement committee examined, show and read in front
of the auction participant about the completeness of bid
document, which consist of :
a) Bid letter in which the validity of bidding is mentioned butthe bid price is not mentioned
b) Original bid collateral
c) The technical bid document and other supporting document
required in general bid document
5) The procurement committee can abort the bid in the moment of
bid opening, if the submitting and completeness of bid
document is not in accordance with the auction document
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6) The procurement committee make the official report on opening
of bid on all entered bid
7) After being read out clearly, the official report of opening of the
bid is signed by the attended member of Procurement
Committee and by two representative of legally auction
participants which appointed by attended auction participants.In case there are only one bid, the official report is signed by the
attended Procurement Committee and , representative of
auction participant, and two witnesses appointed by
Procurement Committee.
8) The official report is distributed to the attended representative
of auction participant without attachment of bid document
7. The evaluation of bid is conducted in accordance with the
stipulation which already regulated in auction document
8. The making of Auction Result official report
a. The Procurement Committee make the conclusion from result of
evaluation which were put in official report of auction result. The
report contain the result of auction conduct, include method of
valuation, used formula, until the establishment of order of the
winner in form of auction participants list. The official report is
signed by the chairman and all the member of procurement
committee or at least two third of the number of The committees
members.
b. The official report of auction result is secret in nature until the
moment of contract signature
c. The official report of auction result must contain following things
1) Name of all auction participants and bidding price and/orcorrected bidding price from each of the auction participants.
2) Method of evaluation used
3) Formula used
4) Other information which considered necessary regarding the
conduct of auction
5) Date of making of the official report as well as numbers of
passed auction participants and the participant which are not
passed on every stage of evaluation
6) The establishment of order of the one winner nominee and two
spareIf there are no bid that fulfill the requirement, then the official
report of auction results must mention statement that the general
auction is declared as failed and the repeat procurement will be
held. If the auction participant that fulfill the requirement is only 2
(two) bidder, then one nominee for winner and one spare is
established. If the auction participant that fulfill the requirement is
only one bidder then, in official report of auction result it can be
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written the statement that the general auction is declared as failed,
and the repeat procurement will be conducted or in the official
report it is mentioned that the bidder is established as the single
bidder nominee.
9. Establishment of the auction winner
a. The procurement committee established the nominee of auctionwinner based on result of evaluation
b. The procurement committee make and submit the report to
Minister/ Head of Institution/agency / Head of Region to establish
the auction winner.
The report is accompanied with the proposed winner candidate and
explanation or other information which is considered to be
necessary as consideration to make the decision.
c. The Minister/ Head of Institution/agency / Head of Region establish
the auction winner based on proposal from the auction committee
d. The supporting data needed for establishing the auction winner
are :
1) Document of general auction, along with its addendum (if any)
2) Official Report of Bid Opening
3) Official Report of Auction Result
4) Summary of the auction process and result of the auction
5) Bid document from the nominee of auction winner and spare of
the winner nominee which already verified by Procurement
Committee and two representative of the auction participant.
6) If delay Is happened in establishing the auction winner and
inflict expiration of the bid / bid collateral , then confirmation is
given to all auction participant to extend the bid letter and bidcollateral without being sanctioned
The Nominee of auction winner can resign without being
sanctioned
10. Establishment of Single Bidder
a. The auction committee establish the single bidder nominee based
on evaluation result
b. Procurement committee make and submit the report to Minister/
Head of Institution/agency / Head of Region to establish negotiation
agreement with single bidder nominee
c. Minister/ Head of Institution/agency / Head of Region can reject orapprove the conduct of negotiation with single bidder nominee
d. The supporting data needed for establishing conduct of negotiation
are
1) General auction document, with addendum (if any)
2) Official report of Bid Opening
3) Official report of auction result
4) Summary of auction process and result of auction
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5) Bid document of single bidder nominee which already verified by
Procurement Committee and representative of single bidder
nominee
6) If there is delay happened in establishing the conduct of
negotiation with single bidder nominee and inflict the bid/bid
collateral to be expired then the confirmation is given to singlebidder nominee to extend the bid letter and bid guarantee. The
single bidder nominee can resign without being sanctioned
7) In case the Minister/ Head of Institution/agency / Head of Region
reject the agreement of negotiation conduct, then the
procurement process is reiterated
8) In case the Minister/ Head of Institution/agency / Head of Region
approve the negotiation conduct, then the Procurement
Committee carry out negotiation with single bidder nominee
with referring to general auction document. Procurement
committee make Official Report of negotiation result
9) Procurement committee make and submit the official report of
negotiation result and other information to Minister/ Head of
Institution/agency / Head of Region to establish the single bidder
10) Minister/ Head of Institution/agency / Head of Region
establish the single bidder
11. The announcement of the auction winner or the single bidder
auction winner or single bidder is announced and informed by
Procurement Committee to the auction participant at least 2 working
days after auction winner or single bidder establishment letter is
received from Minister/ Head of Institution/agency / Head of Region
12. The Auction Participants Refutationa. To the auction participant who objected on establishment of auction
winner or single bidder the opportunity is given to put forth written
refutation, at least in adequate period of time
b. The refutation is submitted to the Minister/ Head of
Institution/agency / Head of Region, enclosed with prove of
irregularities
c. The refutation is put forth either individually of altogether with
other auction participant
13. Issuance of Establishment Letter of Auction Winner
a. Minister/ Head of Institution/agency / Head of Region issue theEstablishment Letter of Auction Winner as the executor of
Partnership project, with stipulation:
1) There are no refutation from the auction participant; or
2) The refutation received by authorized official in the refutation
period is declared as not true, or the refutation is received
exceed the refutation period
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b. The auction participant established as the winner is obliged to
accept the decision. If the pertinent is resign and its bid period is
still valid then the resignation can only be made based on reason
acceptable objectively by Minister/ Head of Institution/agency /
Head of Region, with the stipulation that the auction participant bid
collateral to become state owned property.c. To the auction winner that resign with the un acceptable reason
and the bid period is still valid, beside the bid collateral of the
pertinent become state owned property, the winner also being
sanctioned in form of prohibition to follow general auction activities
for partnership project in two years time
d. If the first order auction winner which established as the winner is
resign, then the establishment can be made to second rank of
auction winner nominee (if any), with stipulation :
1) The establishment of the second order auction winner must be
previously get the establishment of Minister/ Head of
Institution/agency / Head of Region
2) The bid validity period of second rank auction winner nominee is
still effective or the validity has been extended
e. If the second order auction winner nominee is also resign then the
establishment of winner can be made to third order winner nominee
(if any) with stipulation:
1) The establishment of auction winner must previously get the
establishment of Minister/ Head of Institution/agency / Head of
Region
2) The bid validity of the third order auction winner nominee is still
effective or already extended.3) The bid collateral from second order auction winner become
state owned property
4) If the second winner nominee resigned, with unacceptable
reason , the sanction is incurred as mentioned in the above
point 13 c
f. If the third winner nominee resigned, with unacceptable reason,
then sanction is incurred as mentioned in the above point 13 c.
Then the procurement committee make repeat auction, with
stipulation that bid collateral from third order auction winner
nominee is become State owned propertyg. The winner establishment letter must be made at least five working
days after the announcement of auction winner establishment and
soon it be delivered to the auction winner
h. One of the carbon copy from the establishment letter of auction
winner is delivered (without attachment of agreement/contract) at
least to the internal control unit
14. Issuance of Letter of Single Bidder Establishment
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a. Minister/ Head of Institution/agency / Head of Region issue the
Letter of Single Bidder Establishment as the executor of Partnership
Project, with stipulation:
1) There is no refutation from the auction participants
2) The refutation received by authorized official in the refutation
period turn out to be not true, or the refutation is receivedexceed the refutation time period
b. The single bidder established as the executor of Partnership Project
must accept the decision. If the pertinent resign and the bid time
period is still valid then the resignation can only be made based on
reason acceptable objectively by Minister/ Head of
Institution/agency / Head of Region with stipulation that bid
collateral of the single bidder is become the state property
c. To the single bidder which resign with the reason unacceptable and
the bid time period still valid, beside the bid collateral of the
pertinent become state own property, the single bidder also being
sanctioned in form of prohibition to follow general auction activity
for partnership project as long as two years.
d. If the single bidder is resigned, The Procurement Committee can
conduct repeat procurement.
e. The letter of single bidder establishment must be made at least five
working days after the announcement of establishment of the
single bidder and soon it be submitted to the single bidder.
f. One of copy from Letter of Single Bidder Establishment is delivered
(without attachment of agreement / contract) at least to internal
control unit.
The articles with asterisk mark refer to : PRESIDENTIAL DECREE NO. 13YEAR 2010
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