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.