Fertilizer Factory in Bahlil’s Region: Production & Impact
TEMPO.CO, Jakarta – The Supreme Audit Agency (BPK) uncovered irregularities in the Fakfak Fertilizer Industrial Zone. Investment Minister Bahlil Lahadalia has faced accusations of abuse of power.
National Strategic Projects risk becoming a damaging economic legacy of the Joko Widodo and Prabowo Subianto administrations.Beyond creating social and environmental issues, these projects disregard good governance and are plagued by conflicts of interest.
The Fakfak Fertilizer Industrial Zone in West Papua exemplifies these flawed strategic projects. Managed by Pupuk Indonesia with a $1.6 billion (Rp28.4 trillion) investment, construction originally slated for February 2023 didn’t begin until 2026.President Jokowi laid the cornerstone in November 2023.
Promoted as a vital resource for the food estate project in merauke, South Papua, the initiative suffers from basic planning errors.
Pupuk Indonesia initially planned the industrial estate for Teluk Bintuni Regency, West Papua. However, Bahlil Lahadalia-then Investment Minister and Head of the Investment Coordinating Board-demanded the project move to Fakfak Regency, his home region.
This relocation contradicted a feasibility study by Deloitte, a risk management consultant hired by Pupuk Indonesia. Deloitte warned the move would lead to increased costs and potential project failure.
BahlilS intervention was unusual and a breach of protocol. He lacked the authority to order Pupuk Indonesia to relocate the project. Yet, leveraging his position as General Chair of the Golkar party and a close advisor to President Widodo, Bahlil overstepped the authority of the Ministry of State-owned Enterprises, Pupuk Indonesia’s shareholder.
That decision has as proven problematic.