Corruption in Indonesia: Agung Podomoro Land & Pluit City
One of Indonesia's largest listed property developers - Agung Podomoro Land - saw its shares plunge 10 percent on Monday (04/04) after the Corruption Eradication Commission (KPK), the country's anti-graft agency, named the company's President Director Ariesman Widjaja a suspect in a bribery case that also involves a Jakarta legislator. Allegedly, Muhammad Sanusi, legislator of the Jakarta provincial assembly and member of Prabowo Subianto's Great Indonesia Party (Gerindra), accepted money in exchange for support related to the Pluit City project.
KPK Chairman Agus Rahardjo said Agung Podomoro Land President Director Widjaja tried to influence the Jakarta city administration and councilors - without paying attention to the greater public interest - for the sole benefit of his company. By bribing Jakarta legislator Sanusi, he tried to influence the deliberation of draft bills concerning Jakarta's Zoning Plan and Coastal Northern Territory (RZWP3K) for the period 2015-2035 and the North Jakarta Strategic Area Regional Spatial Plan. In one of the land reclamation projects off the coast of Jakarta - called Pluit City - Agung Podomoro Land owns a big stake being one of the main investors behind the construction of a residential and commercial complex.
Jakarta legislator Sanusi was caught on Thursday (31/03) accepting bribes up to IDR 1.14 billion (approx. USD $86,000) - in two transactions - handed over by Agung Podomoro Land employee Triandara Prihantoro. Both men were arrested. Sanusi is member of the Gerindra faction, which holds 14 percent of votes in Jakarta's city council.
Although Jakarta Governor Basuki Tjahja Purnama (Ahok) already granted a principal approval for the land reclamation project, Agung Podomoro Land still needs to clear Jakarta's zoning and reclamation requirements, as well as other necessary permits from various ministries and the navy, before construction can start.
The reason behind the bribe could be a regional regulation draft on the Jakarta Bay’s reclamation that was proposed by the Jakarta government for deliberation at the local House. Local authorities request to oblige developers to allocate 15 percent of the total area of their artificial islands to the city government for the construction of low-cost apartments. Property developers consider this portion too high.
It remains unknown what the impact will be on the multi-billion US dollar Pluit City project.