Friday, May 26, 2006

Battle for control of Indonesia's sports complex

The State Secretary of Indonesia's national government, Yusril Ihza Mahendra, has requested that the Jakarta Capital City Province (DKI) drop its claims to the multi million dollar Bung Karno Sports Center in down-town Jakarta. Yusril told a special session of the House of Representatives that the provincial administration was not competent to manage valuable premises hosting international and national events and argued for the central government, through the State Secretariat, retaining control of the assets. "There are many cases of state assets going missing without trace after being handed over to provincial administration," he said when delivering a list of former state assets that allegedly had been converted into commercial premises or that were neglected under provincial administration management.

As mandated by the Regional Autonomy Law, a House working committee is currently deliberating on a proposed law that will regulate the management of important state property located in the capital and whether it will be left in the hands of the state secretariat or the provincial administration. The 297-square-hectare Bung Karno complex houses the country's best sports venues, including a football stadium (pictured above) but its area has gradually been surrendured to shopping malls and upmarket hotels, managed by private companies that won contracts from the State Secretariat to operate them. A government estimate put the total worth of the property at Rp 18 trillion (about US$2 billion).

The income generated by the commercial operations is supposedly to be used to the benefit of the sporting associations and athletes and the upkeep of the sporing infrastructure but sources tell Asian Football Business Review that less than 30% of the income generated actually reaches that target.

The commercial agreements are also suspect with many regarded as fraudlent. The State Secretariat itself has filed numerous suits against tenants to get the properties back. Among the high-profile cases noted by M. Taufiqurrahman in The Jakarta Post (26 May 2006) is one launched against the operator of shopping complex Plaza Senayan, which was accused of causing Rp 5 trillion state losses from a build-operate-transfer contract signed in 1989. It later transpired that the operator of Plaza Senayan hired lawyers from Ihza & Ihza law firm, founded by none other than the current State Secretary himself.

See also: Indonesian minister proposes new out-of-own sports complex (18 Apr)

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