The Rp 1.38 trillion (US$152 million) loan syndication agreement between PT Semesta Marga Raya and a lender consortium led by state-owned Bank BNI and Bank Rakyat Indonesia for the construction of a 35-kilometer toll road in West and Central Java should not have caused a furor.

The deal should instead have been welcomed as a prompt, right response to the government program to accelerate the development of basic infrastructure. Acutely inadequate infrastructure has long been cited by investors as one of the biggest barriers to new investment in the country. No wonder infrastructure development has been one of the government's top priorities.

The credit agreement also should have been hailed as the right response from the banking industry to the policies of the monetary authority, which has tried since last year to stimulate credit expansion in order to reinvigorate the economy. Banks have been criticized for preferring to put their funds in debt instruments, instead of pumping liquidity into the real sector.

The big loan has, however, raised concerns among the public about the possible abuse of insider information, conflicts of interest, collusion and corruption, because PT Semesta Marga Raya is partly owned by the Bakrie family. Aburizal Bakrie, a very important member of this family, is the coordinating minister for public welfare.

Had it not been for the controversial Bakrie factor, the loan syndication would have simply been considered a normal bank loan, based on a feasible business proposition. But Bakrie has been a highly controversial figure in the country, especially after the mudflow disaster in Sidoarjo, East Java, which is widely believed to have been triggered by the gas drilling activities of PT Lapindo, a company in which the Bakrie family happens to be a shareholder.

Likewise, allegations of conflict of interest have been made against State Secretary Yusril Ihza Mahendra in connection with the complicity of his law firm, Ihza & Ihza, in the disbursement and transfer to Indonesia of $10 million in funds belonging to Hutomo Mandala "Tommy" Soeharto from the London branch of BNP Paribas.

Tommy had hired law firm Ihza & Ihza in 2004 to help expedite the disbursement of the money when Yusril was the minister of justice and human rights.

There also was apprehension among the public early last year when the government announced a crash program to build an additional 10,000 megawatts of power generation capacity to head off an expected power crisis by 2010. The country badly needs additional electricity generation to meet demand, which has been rising sharply along with economic recovery. But the program has been suspected of being "engineered" by several Cabinet ministers with major interests in construction companies.

What makes the public suspicious is the fact that the families of senior politicians and some Cabinet members, including Vice President Jusuf Kalla and Aburizal Bakrie, control the biggest of the few big builders with experience in the construction of power plants. In fact, allegations of collusion have adversely affected the process of tendering the power plant projects.

It is common knowledge among businesspeople that political lobbying and connections are highly influential in winning procurement contracts and other business deals from the government, which is perceived internationally as one of the most corrupt in the world.

Businesspeople also view corrupt senior officials who have business interests, or businesspeople-cum-politicians, as being much greedier than corrupt bureaucrats. Most civil servants are content getting a few billion rupiah for their retirement fund. However, corrupt businesspeople-cum-politicians are like bottomless pits because their businesses always need more funds for expansion, and their entrepreneurship will always make them look out for new business opportunities.

Hence, as long as potential conflicts of interest among Cabinet members and senior officials at ministries are not removed with a credible system of checks-and-balances, the credibility of many government decisions and programs will remain under suspicion, and the tendering of major projects will cause unnecessary controversy.

National companies with links to Cabinet members or senior officials will always be suspected of collusion and the abuse of insider information, however technically competent and financially strong they may be.