RACHMAT Gobel says he is not one to quit. Yet the man in charge of the Southeast Asian (SEA) Games organizing committee admitted to almost giving up weeks ago, when the government gave no word about releasing the funds needed to complete the preparations for the SEA Games’ venue. The amount of Rp700 billion had been pledged to the organizers.
"My name is on the line. I would be totally ashamed if the SEA Games was delayed," Rachmat told Tempo recently in an interview at the organizing committee's offices in South Jakarta. "The funds will be disbursed today at 2pm and I swear to you, the Games will take place on time on November 11, as advertised."
Indeed, following the signing, the ministry transferred Rp10 billion to the ASEAN Para Games organizers in Solo, Central Java, Rp141.5 billion to the Palembang organizers and Rp157.8 billion to organizers in Jakarta. The remainder is to be managed by Inasoc, the Games’ organizing committee.
Much is at stake for Indonesia to pull off this regional sports event. Palembang was initially selected to host most of the events, but with the extremely slow progress on the construction of new and renovated venues, many test events have had to be either postponed or altogether canceled. One particular worry is the aquatic center at the Jakabaring Sports City in Palembang, which is feared will not be completed on time.
Then there’s the issue of transparency. The words ‘SEA Games’ have recently been linked to Muhammad Nazaruddin, a former legislator and treasurer of the ruling Democrat Party, who is now indicted in a bribery scandal, linked to the construction of the SEA Games athletes’ village in Palembang.
With the SEA Games less than two months away, President Susilo Bambang Yudhoyono issued a presidential decree allowing funds to be directly paid out to Inasoc, sidestepping a 1999 law requiring all government projects costing over Rp200 million to be awarded by open tender. The organizers will now be able to directly appoint needed vendors.
Rachmat is well aware of the risks this implies and has taken cautionary steps. "Although there is no open tender, all Inasoc’s business appointments will be monitored by the Finance Development Controller (BPKP)," Rachmat said. The BPKP team will also consist of members of the Attorney General's Office, the Finance Ministry and the LKPP (Goods and Services Procurement Policy Institution). The following are excerpts of an interview with Tempo journalists Yandi M. Rofiyandi, Gita Lal and photographer Dwianto Wibowo:
You and Inasoc officials were ready to quit at one point.
I never said I would quit. I just reminded the government that if they failed to disburse the funds soon, I would hand over this job [organizing SEA Games] back to them. We told them we were in an extremely critical stage, and that we needed immediate disbursement of funds. There was initially no legal certainty for us. Everyone was finding fault with everyone. We were made to feel that the law here could cause us problems. We tried to find solutions. But when we did find solutions, we were told they were not the right way. We were confused, because we were held back by regulations that we ourselves do not fully understand.
Since the presidential decree and regulation was issued this month, who is in charge of the proceeds from ticket sales and merchandising?
All the monies coming in from the sale of tickets and merchandising, initially would go directly to the state coffers. But since we were trying to be efficient and find other ways to fund this event, we thought why not go for ticket sales and proceeds of merchandising? Finally, through the presidential decree, we are now authorized to do just that. The funds will no longer go to the state treasury. I will now manage those funds. Otherwise, it would take a long time for the funds to first go to the state coffers, and for us to request for them, in accordance with government regulations.
How do you propose to select the best vendors without an open tender?
We will not be awarding business arbitrarily just because we have the right to do so. We know which ones are specialized for such events and which of them have the proper qualifications for these jobs.
Are you certain there will be no delays in starting the SEA Games on time?
I can guarantee no delays. Whatever happens, all venues and all infrastructure supporting the SEA Games will be ready. There will be no change in the November 11 opening date. Before the middle of October, all will be ready.
You do realize that many people link the SEA Games event with the case involving bribery suspect Muhammad Nazaruddin.
I want to change this perception, to build standards for similar games in the future. A normal tender process would take 45 days and this would make it impossible for us to hold one right now. The regulations were issued on September 15. Counting 45 days ahead would mean October 31. We will, however, still follow all the procedures. Whatever we do, we will have with us the BPKP. This will be done publicly. The appointments [of businesses] will be done in accordance with the presidential regulation. Procedures will include the number of businesses taking part, official reports will be drawn up. There will also be negotiations on prices and this will be supervised. All of this will be monitored by a team comprising officials from the BPKP, the Attorney General's Office, the Finance Ministry and the LKPP. Standards and qualification are significant here.
Who are the primary sponsors for this event?
Panasonic, Samsung, Garuda, Unilever, Indofood, Indosat and the MNC Group. The torch relay to mark the start and end of the SEA Games will be funded by these sponsors. As for auditing the sponsors’ funds, we are collaborating with Ernst & Young on this.
How much has been pledged by the sponsors so far?
I cannot say as yet, but we do have a target. Some of the sponsors have backed out due to a number of factors, mainly the time factor. This is why I worked so hard [at lobbying] for the presidential regulations to be issued immediately—to convince our sponsors as well as our suppliers. Some suppliers who have been prepared for sometime were wondering whether they would get paid or not. One sponsor had committed to supporting us, but then asked to give a reduced amount. To me, that is tantamount to backing off. It turned out they were just unsure. I convinced them that since the presidential regulations had been issued, there would be no more problems.
Did you expect this kind of bureaucratic red tape when you agreed to be Inasoc chief?
To convince the government to change their policies to reduce bureaucratic red tape is the same, whether you’re dealing with a state-sponsored event or a private project: you need a very strong lobby. The bureaucratic red tape involving this SEA Games was massive. I was pushed to the point where we had to say, these regulations are stopping us from doing our work. If they cannot be changed, it's best that I hand this project back to the government for them to handle.
Why did you take up this position in the first place?
I am a businessman. I believe in industry, and in industrializing the sports sector. My parents were manufacturers. Our philosophy has always been that before we manufacture quality products, we must first develop quality and skilled labor. People Before Product. Here we are trying to build this country so we can attract investments. Why have we failed to get investors from the Middle East? Because we don’t have their trust, because they don’t believe we have skilled labor. I intend to change this.
How can a mega-sporting event attract investment to Indonesia?
You shouldn’t see this SEA Games as a separate event. This is an event that can pull in investments and boost the economy. Look at the World Cup event in South Africa. Is South Africa better than Indonesia? Their stadiums may be great, but outside them, the streets are still crime-ridden. Yet, the country really tried to show that their people were skilled, capable and prepared to host the World Cup and that business and trade would come with hosting such a major event. You will not hear a single bad story about South Africa when it is linked to how they hosted the World Cup.
Then there is Vietnam [for the 2003 SEA Games]. When Vietnam declared its willingness for the first time to host the Games, they announced it during a Japan-ASEAN economic gathering. They used this as their PR (public relations) base and showed off the fact that their people were prepared. This pulled in so much investment into their country.
Good sports events are always great PR for a nation—particularly when you see how our athletes are working and practicing to ensure they win. When I see them, I really feel that if we ever back out, it would be terrible. I would be ashamed.
How much will be spent on this year's SEA Games?
At least Rp1.3 trillion. That’s just to host the Games, but it also includes hosting the ASEAN Para Games in December in Solo, Central Java.
What can be learned from this SEA Games experience?
Certainty is required. If the intention is to hand it over to the private sector, do so 100 percent. Let the private sector handle and manage it from start to finish.
Do you have any plans to join the government?
I have no such ambitions, because then I would have to be totally accountable to all the people of Indonesia. That is a massive undertaking. I don’t see this SEA Games as managing a project. This is my bit in helping to build optimism and spirit in order to boost economic growth.
Place & Date of Birth
Jakarta, September 3, 1962
- Honorary doctorate from Tokushoku University in Tokyo (2002)
- Degree in International Trade, Chuo University in Tokyo (1987)
Career & Organization
- CEO, PT Gobel International
- Deputy Head of Indonesian Chamber of Commerce & Industry (Kadin) on Industry, Technology and Maritime
- Chairman, Indonesia-Japan Economic Committee (IJEC)
- Chairman, Electronic Producers Association (Gabel)
By Yandi M. Rofiyandi, Gita Lal and Dwianto Wibowo
No. 05/XII/28–03 October 2011