Opening Remarks Chairman NPPA Agus Raharjo

8/3/2019 Opening Remarks Chairman NPPA Agus Raharjo

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REPUBLIC OF INDONESIANATIONAL PUBLIC PROCUREMENT AGENCY (N P P A)

KEY NOTE SPEECH FOR

ASIA AND THE PACIFIC CONFERENCE ON

ELECTRONIC GOVERNMENT PROCUREMENT (e-GP)

FROM:

CHAIRMANOFNATIONALPUBLICPROCUREMENTAGENCY

DENPASAR, 22 NOVEMBER 2011


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REPUBLIC OF INDONESIANATIONAL PUBLIC PROCUREMENT AGENCY (N P P A)

Bpk. Made Mangku Pastika, Governor of Bali;

Bpk. Ahmad Heryawan, Governor of West Java;

Bpk. Lukita Dinarsyah Tuwo, Vice Minister of National Development Planning/Vice

Chairman of BAPPENAS;

Mr. Steve Groff, Vice President of Asian Development Bank;

Representatives and Colleagues from friendly nations of the Asia and the Pacific

region;

Representatives and Colleagues from NPPA, Ministries, Provinces and Asian

Development Bank;

Ladies and Gentlemen,

Good Morning,

Assalamualaikum Warahmatullahi Wabarakatuh

It brings me much honor and pleasure on behalf of the National Public Procurement Agency

(NPPA) to welcome you all for the opening ceremony of the Asia and the Pacific Conference

on electronic Government Procurement (e-GP). This conference is made possible by the

close coordination between the NPPA as the lead agency from the Government of Indonesia

with the Asian Development Bank with the intent to bring together procurement specialists

from across Asia and the Pacific along with development partners from multilateral andbilateral institutions and potential private sector partners. In addition, achievers in our nation-

wide drive to implement e-GP that hail from successful e-procurement units from across the

archipelago are also present today, they merit my honorable mention.

Distinguished guests,

As procurement specialists, we would not question the importance and benefit of e-

Procurement in the development of our respective countries. If the process of procurement is

implemented correctly, then we not only would derive benefits from significant savings ofstate finances, but also the opportunity to develop a more competitive and healthy business


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climate. In addition, credible procurement processes are also viewed as a preventive means,

which reduces corrupt practices.

However, in line with the current developments, our assessment is that the procurement

processes that were done so far is not sufficient enough to support change and national and

international dynamics that oftentimes move faster. In the past few years, our Government

has indicated an increasing desire to implement a more effective procurement process, more

efficient, more transparent, and more competitive. This is the underlying reason why we

develop and implement electronic procurement systems or what we often refer to as

electronic government procurement (e-GP)


As was conveyed by the Vice Minister in his remarks, Indonesia commenced to develop e-

GP in the year 2005. At that time, it was not easy to develop an e-Procurement system

recalling that the telecommunications and communication infrastructural conditions were not

adequate and the level of penetration, spread and ICT literacy that was not as good as those

today. Furthermore, the capacity and competency of procurement specialist and business

persons at the time needed to be enhanced, and also the geographic obstacle that

Indonesia, as a sprawling archipelagic state poses.

However, these challenges did not dampen the will of the government to develop an e-GP

system. At the time even through instructions from the President, resolutions from the

National Technology Council and other related regulation, the government was given a

mandate to formulate a national strategy in the framework of the development and

implementation of e-GP in the short term.

The strategy that was taken by the government of Indonesia at the time among others the

acceleration and strengthening of the ICT sector, the development of systems, businessmodels and related e-GP, training and public awareness for procurement specialist,

business persons, and the wider society as a result of paradigmatic shift.

In other words, mainstreaming e-GP in programs and policies in various sectors of national

development is one of the key success factors of the implementation of the e-GP.


Since the first time the e-GP was implemented in the year 2008, e-procurement service units

is growing in numbers. In 2008, the number of e-Procurement units is only 11 units but

continue to grow to 33 units in the year 2009, 137 units in the year 2010 and 293 units in the


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year 2011. This indicates a larger need for procurement entities to conduct procurement

through e-GP. In addition, this increase also reflects the greater trust of procuring entities

and businesses that the e-GP system can deliver greater benefits.

The number of packages that are conducted through the e-GP also keep on increasing,

starting from 33 works packets in 2008 to 23,719 packets in the year 2011. Also increasing

at a meteoric rate is the transaction value, which was from about 53 billion Rupiahs in 2008

to about 51 trillion Rupiahs in the year 2011. The savings that occur show significant

numbers which is about 12-15 percent or about four trillion Rupiahs in the year 2011.

However, according to our government these are not enough, especially if we compare

between the total government procurement that is listed in the state budget with the total real

transaction value that is currently processed through e-GP. As an illustration, the total

volume of government procurement as was listed in the state budget of the 2011 fiscal year

is equivalent to USD 39 billion, of this amount only about USD 5.7 billion are being spent

through e-GP.

Consequently, in the framework of accelerating the implementation of the e-GP nationally,

recently the Government through the Presidential Decree No. 54 of the year 2010

concerning public procurement of goods and services, stipulated the obligation of all

procuring entities to utilize the e-GP for a part of or the whole packet of works for the year

2012.

As a result, in the year 2012, which is coming very soon, the traffic through the e-GP

systems would drastically increase and the transactions processed through this system

would also be greater. It is much hoped that the whole primary and supporting systems is

ready and is working properly.


In a sequential manner, the Indonesian government has initiated various measures to

improve the e-GP systems. As was reported to the President and to the Minister and Vice

Minister for National Development Planning/Head of the National Development Planning

Agency, NPPA has gradually integrated the national e-GP systems. The systems integration

is primarily meant to create a national single market that can easily be accessed by vendors

and procuring entities alike as well as other related stakeholders.

The integration of the national e-GP system to become a unified single market is aligned to

the future government policy direction and programs that is designed to create an Indonesia


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Wassalamualaikum Warahmatullahi Wabarakatuh

Jakarta, 22 November 2011

Agus Rahardjo

Chairman of National Public Procurement Agency

Opening Remarks Chairman NPPA Agus Raharjo

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