RI REJECTS LOANS WITH COMMITMENT FEE

Jakarta, June 29 (ANTARA) - Finance Minister Sri Mulyani Indrawati has said Indonesia will not take overseas loans requiring Indonesia to pay commitment fees.

"Since 2004, Bappenas (National Development Planning Board) has formulated readiness criteria for project loans to be taken by Indonesia," Sri Mulyani Indrawati, said here on Monday, when speaking at a working meeting with the House of Representatives (DPR)'s Commission XI to discuss the country's loan position and fiscal sustainability.

Among those attending the meeting were the House's Commission XI chairman, A. Hafiz Zawawi, Development Planning State Minister/Head of Bappenas Paskah Suzetta, and BI Deputy Governor Hartadi A. Sarwono.

"Bappenas has applied project preparedness criteria. If the projects are not ready, we don't take the loans and won't go to the State Budget, so that there is no more commitment fee," the finance minister said.

According to her, the government (Bappenas and the finance ministry) has conducted disciplinary measure in the local management, including when meeting creditors.

"We will not sign a loan agreement unless there is a project preparation for its implementation, so there will be no longer commitment fee charge," she said.

The finance minister regretted misunderstandings that as if the past practices in loan management was still going on until now.

"We affirm that the loan management policy has completely changed since the reform era, with the existence of the laws on state financial sector," the minister said.

Minister Sri Mulyani said that thanks to the current loan management system, the government could no longer take overseas loans like they used to in the past where there had been no transparency and it had been done outside the State Budget (APBN).

Commenting on a criticism from the Corruption Eradication Commission (KPK) that there was quite long commitment free for project loans, the minister said it had happened in the past.

"It happened in the past when the loan policy was so complicated administratively which disadvantaged Indonesia," she said.