Unapproved Commitment Fees in Formula E

The speaker of the Jakarta Legislative Council (DPRD) has said the payment of the commitment fee for the organization of Formula E was made before the regional budget (APBD) revision was approved. This is considered a vi

KOMPAS/ERIKA KURNIA

The plot of land is planned to be built into a Formula E circuit, in the eastern area of Ancol, Pademangan, North Jakarta, Wednesday (29/12/2021)..

JAKARTA, KOMPAS – Jakarta Legislative Council (DPRD) speaker Prasetyo Edi Marsudi said that part of the commitment fee for the hosting of Formula E, a single-seater electric car racing championship, was paid by the Jakarta administration before the 2019 budget revision was agreed to by the DPRD. The Rp 180 billion commitment fee was procured through a loan from Bank DKI.

Prasetyo made the statement while under questioning by the Corruption Eradication Commission (KPK) at the Merah Putih Building in Jakarta on Tuesday (8/2/2022). He was questioned in relation to the Jakarta administration’s plan to bring the Formula E championship to the city.

"There was an [unapproved delivery of commitment funds] during the build-up to Formula E. The Jakarta provincial government applied for a loan of Rp 180 billion from Bank DKI, which was later paid to the Formula E organizing committee," he said.

There was an [unapproved delivery of commitment funds] during the build-up to Formula E.

The Jakarta government was said to have paid race principal Formula E Operations (FEO) a commitment fee of Rp 560 billion in pound sterling. Some 10 million pounds were paid on 23 Dec., 2019, 10 million pounds on 30 Dec., 2019, and 11 million pounds on 26 Feb., 2021.

Prasetyo criticized the Jakarta government’s move, saying the payment should have been made after the revised budget was approved. "According to the law, when there is a regulation on budgeting, only [after its passage] can [payments] be made," he said.

Apart from Prasetyo, the KPK investigation team also examined several other witnesses, including Jakarta Inspectorate Office head Syaefulloh Hidayat. However, KPK acting spokesperson Ali Fikri declined to disclose the details of the questioning.

ERIKA KURNIA

Members of Commission B of the DKI Jakarta DPRD paid a working visit to the location of the Formula E circuit construction project, in Ancol, Pademangan, North Jakarta, Wednesday (29/12/2021)..

Bank loan

Based on a search by Kompas, on 15 Aug., 2019, the Jakarta provincial Youth and Sports Office issued a letter on the planned Formula E event. The letter stated that the Jakarta administration would have to pay the FEO commitment fees for five consecutive years.

These funds were to be allocated as follows: 20 million pounds for the 2019/2020 installment, 22 million pounds for the 2020/2021 installment, 24.2 million pounds for the 2021/2022 installment, 26.6 million pounds for the 2022/2023 installment and 29.2 million pounds for the 2023/2024 installment.

In order to fulfill this commitment, on 22 Aug., 2019, the Jakarta governor sent a letter to the sports office ordering it to apply for a loan from Bank DKI. Meanwhile, as reported on the website of the Jakarta DPRD, the 2019 budget revision was agreed upon by the legislature and the Jakarta administration on 19 Sept. 2019.

Gunung Kartiko, director of business development of event organizer PT Jakarta Propertindo (Jakpro) and Formula E managing director, said the commitment fee of Rp 560 billion originally paid for the 2020/2021 installment had been renegotiated. The fee could now be used to hold three races for three years (Kompas.id, 6/10/2021).

This article was translated by Musthofid.