Almost all people who are dealing with construction business know Waskita Karya. It is a name of a well-know state owned contractor. In Indonesia’s construction business they are one of the top 10. The company which found on 1961 has experiences in building skyscrapers. The BNI tower which is the highest building in Jakarta marked their achievement. Big projects like bridge which are connecting islands in Batam was done successfully. Successes in housings are the same as mentioned previously. In short Waskita Karya (WK) is a highly regarded and reliable contractor company.
But what is going on in Aceh? Kuntoro, the head of BRR slammed WK down. With his order he blacklisted WK. The decree which issued yesterday is refrained WK to have a job in Aceh for 2 years. Everybody who knows WK, like me, was surprised. ¿Qué Pasa. What was happened?
Last year WK won a contract for 1,050 houses from Turkish Red Crescent Society. The project is in Kemukiman Lampuuk, Aceh Besar and Desa Bitai, Banda Aceh. I believe because of WK excellent track record, they entrusted the 90.3 billion Rupiah project. But last December in the commemoration of 1 Year Tsunami, the leading light of WK turns to grow fainter. None of the house was completed.
What was happened to WK can be happen to any contractors or NGOs. So these are the lessons learnt:
1. Renew the mind set. If we go to do the reconstruction work we have to change our mind set. The mentality from doing business in the normal area to the state of mind of working in disaster area. We have to live by our own. We have to have a strong system to protect our values and mission. We have to prepare our mind to well-perform in the place with no bank, no internet connection, no cellular network, no electricity, no medical support and sometimes no food. In short there is no business at usual. I think WK still in the mind set of normal condition area.
2. Be careful when budgeting. Providing all by our self may costly. Meanwhile along the process the costs may soars. When WK sub-contracted the project with 68 million Rupiah, they thought the cost is sufficient until the project completion. They may surprise with the skyrocketing price for more than 40% of construction materials.
3. Transparency and equality. We have to treat equal to all sub-contractors. WK gave the job to PT Almahdali with 82 million Rupiah per-unit. But WK gave the same job to 6 local contractors with 68 million Rupiah per-unit. At the end of the day, the 6 local contractors asking for a rise until 80 million Rupiah unless they stop the work.
4. Be clear in the contract document. There were dispute between WK and the 6 sub-contractors. They were mentioned did not know about the material specification, so they asking for the rise. The local contractors said, they just knew the material just did not fit with the specification in the middle of the work. I don’t know this is true or not, but with the clear in contract document the dispute may be minimized.
5. Give the sub-contractor job in staggered. Do not award the contractor just in one shot. This is the disaster area, everyone may experiencing failure. If we give big number of money for down payment to our subcontractor, it is difficult to withdraw when they failed. Release the job or in package is a better solution. In this case WK awarded Alhmahdali 315 houses, but none the house was completed.
6. Be careful of 2 tier work. If we have to give our work to sub-contractor, be careful that the sub-contractor is just looking for fee. Obviously WK them self is looking for fee. GeRAK anticorruption watch mentioned, with this sub-contracting scheme, WK gains 18.9 billion Rupiah.
Arwin Soelaksono - Disaster Response & reConstruction
