The Minister of Finance recently released Regulation No. 90/PMK.08/2010 to regulate the procedure on how the government is to select creditors that could provide financial assistance for all the government’s endeavors. The Regulation, however, governs the selection of financial assistance providers only from certain local creditors.
The Regulation, which implements Article 14 (1) of Government Regulation No. 54 of 2008, stipulates that certain local creditors will consist of state or regional enterprises, or regional governments.
The local creditors who will grant loans to the government will be selected through a tendering process in which such will be held by a tendering committee established by the Director General of Debt Management of the Ministry of Finance. Since the creditors are only open to certain parties, the tendering process can be said as a limited tendering process.
The Regulation sets out requirements that the candidates need to fulfill in order to participate in the process. According to Article 9, the requirements provided for state and regional enterprises are differentiated from the requirements for regional governments. For the former, the requirements include having an approval from the relevant authorities and a capital at least IDR 1 trillion. Meanwhile, for the latter party, the prerequisites include having an approval from the Regional Legislative Body (DPRD), free from all obligations mandated by the existing regulations, and free from any obligations to other parties.
Generally, the candidate creditors must go through several procedural steps before finally determined as the winner of the tender. In this context, these steps will include submitting proposals, and if necessary, attending the so-called ‘beauty contest’ - a question and answer session before the tendering committee. In detail, these steps are elaborated in Chapter VI of the Regulation.
Once the committee has reached its decision, the result of the tender will be forwarded to the Director General for approval. Subsequently, the committee must inform the result at least 2 business days since the committee received the Director General’s determination.
The winning creditor will then conclude a contract to ‘seal the deal.’ The contract will be signed by both the Minister of Finance and the Director of the state or regional enterprises, or the Head of the regional governments (Governor, Mayor, or Regent).
Any costs arise during the tendering process will be borne by the State Budget.
The Regulation has been in force since 21 April 2010.
The Minister of Finance recently released Regulation No. 90/PMK.08/2010 to regulate the procedure on how the government is to select creditors that could provide financial assistance for all the government’s endeavors. The Regulation, however, governs the selection of financial assistance providers only from certain local creditors.
The Regulation, which implements Article 14 (1) of Government Regulation No. 54 of 2008, stipulates that certain local creditors will consist of state or regional enterprises, or regional governments.
The local creditors who will grant loans to the government will be selected through a tendering process in which such will be held by a tendering committee established by the Director General of Debt Management of the Ministry of Finance. Since the creditors are only open to certain parties, the tendering process can be said as a limited tendering process.
The Regulation sets out requirements that the candidates need to fulfill in order to participate in the process. According to Article 9, the requirements provided for state and regional enterprises are differentiated from the requirements for regional governments. For the former, the requirements include having an approval from the relevant authorities and a capital at least IDR 1 trillion. Meanwhile, for the latter party, the prerequisites include having an approval from the Regional Legislative Body (DPRD), free from all obligations mandated by the existing regulations, and free from any obligations to other parties.
Generally, the candidate creditors must go through several procedural steps before finally determined as the winner of the tender. In this context, these steps will include submitting proposals, and if necessary, attending the so-called ‘beauty contest’ - a question and answer session before the tendering committee. In detail, these steps are elaborated in Chapter VI of the Regulation.
Once the committee has reached its decision, the result of the tender will be forwarded to the Director General for approval. Subsequently, the committee must inform the result at least 2 business days since the committee received the Director General’s determination.
The winning creditor will then conclude a contract to ‘seal the deal.’ The contract will be signed by both the Minister of Finance and the Director of the state or regional enterprises, or the Head of the regional governments (Governor, Mayor, or Regent).
Any costs arise during the tendering process will be borne by the State Budget.
The Regulation has been in force since 21 April 2010.
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