Ridwan Max Sijabat, Jakarta – The Aceh-Nias Rehabilitation and Reconstruction Agency (BRR) acknowledged Monday bypassing official procedures in carrying out several projects, but said its actions were justified under existing regulations governing emergency work in Aceh.

It was responding to allegations of irregularities, including corruption and collusion, in five projects valued at a total of Rp 23.8 billion carried out in the 2005 budget year that ended in April 2006.

Acting BRR secretary Teuku Kamaruzzaman said the agency directly appointed some partner companies to complete the projects because it was facing numerous technical and bureaucratic hurdles in carrying out the work.

"The BRR appointed PT Holcim Indonesia to destroy 200 tons of unwanted pharmaceuticals in Aceh and Nias because the company is the only one in the country with a license and experience in doing such work," he said at a press conference in Jakarta on Monday. It was held in response to allegations raised by the independent Indonesian Corruption Watch. The ICW had questioned, among others, the "waste" of Rp 1.2 billion for this project.

Kamaruzzaman said the agency also directly appointed PT Semar Kembar Sakti to provide office equipment and several publishing companies to print books on the BRR and Aceh on the one-year anniversary of the Dec. 26, 2004, tsunami. He said the companies were appointed without a tender not because agency officials had ties with the firms, but because the projects were included in the category of emergency work and direct appointments were allowed under existing regulations.

A presidential decree on the agency requires it to hold public tenders for all projects valued at Rp 50 million or more, except for those projects classified as emergency work.

Amin Subekti, deputy chairman for financing and planning at the BRR, denied any collusion in the direct appointment of PT Wastuwidyawan to draft detailed engineering maps of villages in Aceh. He said the direct appointment was allowed by the presidential decree, and was based on the company's professionalism. He acknowledged that Andi Siswanto, the BRR's deputy chairman of housing, used to work for the company but said he had long since resigned.

Heru Prasetyo, BRR's director of donor and international relations, also denied collusion in the BRR's public relations projects. He said the appointment of PT Emmerson Asia Pacific to handle the agency's public relations was based on a limited tender.

"We invited five media consultants (to take part in the tender) and only three accepted the invitation. After presenting their programs we picked one," he said, adding that all three of the companies, including Emmerson, were well-known in the field. Amin reiterated the agency's stress on "accountability and transparency... to maintain the confidence of international donors."

The slow pace of work and the low absorption of the reconstruction budget has a lot to do with bureaucratic problems, difficulties in securing a supply of raw materials and problems in land appropriation, as well as many other factors, he said.

"For example, the presidential decree on direct appointments in housing projects, planning and projects running for two consecutive years expired on July 30, but our request for its extension has not yet received a reply," he said.

Amin also said that as of December 2005, BRR spending reached only 10 percent of its budget, but by the end of April 2006 spending had reached 62.5 percent of the budget. This was possible "because all reconstruction projects have already been offered through public bidding," he said.

The BRR says it is seeking to assure the international community about its work in Aceh and Nias, so they would donate around US$1.1 billion to reach the total required budget of $6 billion.