Indonesian Audit Agency's Critical Notes For Anies About Formula E Which Has Not Been Implemented So Far

Illustration (fiaformulae)

JAKARTA - The dream of DKI Jakarta Governor Anies Baswedan to hold an international car racing event has to be postponed. Formula E, the electric-powered car race which was supposed to start on June 6, 2020, had to be postponed due to the COVID-19 pandemic.

In this regard, the DKI Jakarta Representative Audit Agency (BPK) reported the results of the audit of the DKI Jakarta Provincial Government's financial transactions in planning the Formula E event in 2019 to 2020.

In a report issued on June 19, 2020, the Indonesian Audit Agency (BPK) noted that Anies had paid a commitment fee to Formula E Operations Limited (FEO) and a Bank Guarantee of nearly IDR 1 trillion.

"Based on research on financial transactions related to the implementation of Formula E, it is known that payments made to FEO are worth GBP 53,000,000 or the equivalent of IDR 983,310,000,000," said Head of Indonesian Audit Agency (BPK) Representative Office for DKI Jakarta, Pemut Aryo Wibowo, as quoted by VOI from the audit report on Friday, March 19.

In detail, there is a commitment fee paid in 2019 worth IDR 360 billion. Furthermore, in 2020, the paid commitment fee is equivalent to IDR 200.3 billion. Then, the Bank Guarantee that is paid is worth IDR 423 billion.

The Indonesian Audit Agency (BPK) noted that all of the financing costs for the electric-powered car racing activities, which have been prepared since 2019, are still being borne by the DKI Regional Budget (APBD) funds.

"Funding for the 2019/2020 Formula E activities, both through the budget of the Youth and Sports Service (Dispora) and PT. Jakpro's regional capital participation (PMD), the financing burden is still very dependent on the DKI Jakarta Province Regional Budget (APBD) funds," said Pemut.

In fact, Anies has issued Governor Regulation Number 83 of 2019. Its contents, Anies assigns the Regional-Owned Enterprises (BUMD), PT. Jakpro, as the organizer to be able to find sponsors or cooperation from other parties.

Pemut said this problem would result in PT. Jakpro being unable to independently manage Formula E activities, thus increasing the risk of failure in the implementation.

Therefore, Audit Agency (BPK) urged Jakarta Youth and Sports Service (Dispora) to encourage PT. Jakpro to cooperate with other parties. In principle, in order to find other sources of funding in implementing Formula E apart from the Regional Budget.

"The concept of third-party funding as sponsorship is an indispensable alternative to financing. This can reduce the dependence on Formula E financing on the Jakarta Regional Budget," said Pemut.

The Jakarta Provincial Government has been asked by a number of parties to withdraw the money disbursed so that it can be diverted for handling the pandemic.

Audit Agency (BPK) noted that PT. Jakpro as the organizer of the Regional-Owned Enterprises managed to withdraw from a bank guarantee worth IDR 423 billion. Unfortunately, the Audit Agency (BPK) noted that the commitment fee was unsuccessful.

"The fee for phase 1 of the 2020/2021 season that has been paid to FEO is worth GBP 11,000,000.00 or the equivalent of IDR 200,310,000,000 cannot be withdrawn," said Pemut.

Pemut said, the results of negotiations between PT. Jakpro and Formula E Operations Limited (FEO) to attract a commitment fee were unsuccessful. Even though the first and second Formula E seasons were canceled, the money could not be recovered.

"FEO stated that the fee is a financial guarantee for the potential obligations of PT. Jakpro according to the previous agreement," said Pemut.

Audit Agency (BPK) assesses that the Jakarta Provincial Government has not been optimally conducting negotiations. Therefore, the Audit Agency (BPK) asked PT. Jakpro as the organizer of Formula E and representatives of the Jakarta Provincial Government to renegotiate with the FEO related to affirmation and clarify the status of the sustainability of the cooperation and the status of the funds that have been deposited.

Deputy Governor of Jakarta, Ahmad Riza Patria, responded to the results of the Audit Agency regarding Formula E. According to Riza, the DKI Jakarta Provincial Government still wants to hold Formula E. The plan is that international car racing will start to be held in 2022.

"Due to the COVID-19 pandemic period, in 2020 and 2021 it is not possible. We have decided together with related parties, we will carry out Formula E in 2022. Hopefully, in that year the atmosphere will be different from the pandemic. Will be glad if the decrease is drastic," replied Riza.