Gas Pipe Procurement - KPPU Finds a Breach of the Law

The Commission for the Supervision of Business Competition (KPPU) handed-down its decision in Case No. 22/KPPU-L/2005 on the tender process for the procurement of gas pipes for South Sumatera - West Java (SSWJ) project stage II. The report that initiated the investigation alleged breaches of Articles 19(d) and 22 of Law No. 5 of 1999 on the Prohibition of Monopolistic Practices and Unfair Business Competition (Anti-Monopoly Law).

The case involved 8 Reported Parties and the most notable among these was the State Gas Company (PGN or Perusahaan Gas Negara). Ultimately, the decision hinged on the fact that PGN did not follow its own internal procedures or those stipulated in the relevant laws and regulations with respect to the procurement of goods and services.