A moral? [AUGUST 10th 2007]

T he electricity bill for my house in Jakarta was shocking high. It suddenly went from 1,7 juta (200 US) a month up to 6 juta one month later (750 US)! I was away in Bali and the house owner was probably aware of this. Fortunately I have Roos around - who should receive a medal for keeping my life more or less organized - and she informed me on this. I called the management responsible for the townhouse I live in, and before I could even finish my demand for a specification, a voice interrupted me and said straight away that the bill indeed had been wrong. Without any explanation or excuse, he just hung up. I called back, but the finance manager was 'out for lunch'. Two hours later, he was in a meeting and four hours later he was 'out of town'. Was this a mistake or a scam? (readers please note - make sure you check the KVA fees of your landlord when you rent a property…in most cases you will never get access to the real PLN bills and the landlord can charge what he wants.)  

People often want to know if I have to deal with mafia practices, like bribing government officials or using preman (local street thugs) for protection. When I started in this business some eight years ago, I was a bit worried myself. I had no idea what to expect. Getting a license is in Indonesia a long process and in the process of organizing and obtaining these 'izin-izin' , more izin-izin's are needed. So you use a middleman. He is the one that basically does the bribing. Somehow, these middlemen also have a tendency of popping up at moments when things get out of hand. They are suddenly there with the soothing words like ' kita bisa bantu' (we can help you) and 'gampang (easy) mister, don't worry' combined with a calming smile and a controlled inhaling of cheap kretek. So you end up making a package deal that will include all licenses. Within a few weeks he will come back with at the whole stack of papers and he will demand his fee as agreed on. Later on, you will find out there is always one little stamp that he did not organize yet, so that will be another several million rupiah. You can argue, but being that close to the complete izin packet, the middleman knows you will pay that extra anyway. In the end, you hope you can earn these extra expenses back through clever negotiating with the tax people, once they arrive (or use a tax middleman/consultant again, and the story will repeat itself).  

We occasionally have the ordinary preman come to our bars, and they always demand to see the manager. We normally tell them "Maaf pak, the GM is not in, but however, the owner, who happens to be an army general, will come later in the evening." The preman normally disappears within 1 minute. The police sometime look around the kitchen, but most likely because they are hungry. The meals we give them are booked as 'spoiled' or 'theft', but if the policeman is an officer we write it off as 'food tasting' in our books.  

There is another kind of a racket you really have to watch out for. Its the people installing your electricity. Every time I build a bar, I could choose between a 'clean' PLN deal or a manipulated subscription whereby the electricity bill be roughly one third of what you would legally have to pay. I never took the risk, as it is basically stealing, but I know of a friend (yes, a lot of my friends are thieves) who fell for the scam. He paid the handy electrician a 'fee', for releasing his tricks on the PLN connection and amazingly the trick worked. His bill was really low. That was, for a few months, until PLN's 'investigation team' came. It was obviously no coincidence that their 'routine check' discovered a manipulated connection and the offer to my friend was to pay 150 juta to the survey team directly or face the risk of jail or a 500 juta penalty. His handy PLN middleman was unreachable.

You may notice that often my story has no moral to it. It is because there are no morals here. The above stories are also not intended to discourage people to do business in Indonesia. The system has also many advantages and the longer you survive the easier it gets. The police, PLN, the Tourism Board, the DKI, the tax people, in the end you know them and they know you and the negotiating gaps are getting smaller. There are lot of business opportunities in Indonesia. A lot. And things are only getting better. Just make sure you choose the correct middlemen to get things done to prevent yourself from a lot of stress. Or come to BuGils a bit more often...(Ka ching! I did find a moral to the story in the end!)
Cheers, Bartele