Following the collapse of a number of sports buildings last December, reportedly due to the subsidence of land and inappropriate soil texture beneath, Sports and Youth Affairs Minister Andi Mallarangeng ordered the stoppage of the project.
Besides technical problems, the project, which is expected to develop a national sports school, training and education center, is also grappling with a legal problem as funds for its construction are alleged to have been marked up.
The Corruption Eradication Commission (KPK) has asked the State Audit Board (BPK) to conduct an investigation into the case. While the BPK is still preparing a final report, rumors abound that some names have disappeared from the report after being included initially.
Media reports allege that there has been interference in the BPK which has caused the state audit agency to scrap the names.
A KPK spokesman, however, expressed conviction that there was no illegal intervention.
"I do not believe that there has been any intervention. In this case, the KPK has asked the BPK to conduct a comprehensive audit on the Hambalang project, including the losses caused to the state," KPK spokesman, Johan Budi SP said on Friday.
Budi said that state auditors calculate losses incurred by the state due to the alleged marking-up in the Hambalang project and the anti-graft body is cooperating with the state audit board.
The KPK spokesman also said that the KPK is yet to receive a report on the results of the BPK audit on the Hambalang sports complex project.
However, he stressed that the KPK will not base its investigation on the BPK audit results but on its own follow-up examinations before raising the case`s legal status to the investigation level.
"If the status of the examinations is raised to the investigation level, it would mean that the KPK has found enough evidence of corruption in the implementation of the Hambalang sports center project," he said.
However, the BPK has not finalized its investigative report yet, which is expected to be finished sometime next week.
Taufiequrachman Ruki, a member of BPK, said that the BPK`s auditors were still working to finish the investigation process before the matter is brought before the audit board meeting.
"We will carefully cross check what is found and written in the report. We expect the report to take another week to finish," he said.
However, he added that the BPK`s initial audit has discovered that the disbursement of initial funds for the development of the sports complex had been transferred to different recipients.
"It still has to be proven whether or not the initial disbursement was an underlying transaction. We have to reveal it. We will investigate if it is in accordance with regulations or not. But for the time being there is an indication that the flow of the fund has been suspicious," he said.
The Hambalang sports complex project was started in 2003 when it was under the auspices of the Directorate General of Sports of the Ministry of Education and Culture. It aimed to build more sports facilities outside the Ragunan Sports Centre in East Jakarta.
In the 2004 -2009 period, the project was taken over by the Ministry of Youth and Sports Affairs, which handled land clearance, land certificate, geological study and the drawing up of its master plan.
In 2009, Ministry of Youth and Sports Affairs proposed a budget of Rp1.25 trillion for the construction of the project and the budget allocation was raised to Rp1.175 trillion through the Ministry of Finance.
Of the proposed budget of Rp1.175 trillion, an allocation of Rp275 billion got the required approval. Rp125 billion were to be allocated through the 2012 state budget and the remaining amount of Rp150 billion was to be allocated through the revised 2012 state budget.
According to media reports, the Hambalang project is expected to be built in three stages. The total funds will amount to Rp2.5 trillion, if the funds for the procurement of sports facilities are also included.
However, the funds being investigated by the KPK are only those allocated for its physical construction, worth Rp1.2 trillion.
The KPK has named Deddy Kusdinar, the head of youth and sports affairs ministry`s finance and household bureau, as a suspect because of his role as the ministry`s former planning bureau chief and for allegedly abusing his power.
Kusdinar, who was in charge of the tender process, was charged by the KPK last July over graft in the multi-trillion rupiah project.
The Hambalang case came to fore when it was revealed by M. Nazaruddin, a former Democrat Party treasurer and a fugitive in connection with the alleged corruption in the construction of an ASEAN athlete housing complex in South Sumatra.
In a telephone conversation with a private TV station in July 2011, Nazaruddin said that the tender winners for the Hambalang athlete training center project had been decided even before they were called.
Nazaruddin added that PT Adhi Karya and PT Wijaya Karya paid Rp100 billion in bribes to win the tenders for the project worth Rp1.5 trillion.
During the conversation from an undisclosed overseas location, Nazaruddin said that PT Anugrah Nusantara played a key role in arranging government contracts whose funds were to be allocated through the revised state budget.
PT Anugrah Nusantara, which Nazaruddin said belongs to Anas Urbaningrum, general chairman of the ruling Democrat Party (PD), collected funds from state-owned companies (SOE) such as Adhi Karya (ADHI) and Wijaya Karya (Wika) to enable them to win the tender.
The Hambalang project is a sports center project designed for athletes in Hambalang village, Citeureup sub-district, Bogor district, West Java.
The athlete training center will consist of several buildings, such as dormitories and training halls. It is spread over an area of 32 hectares and was initially expected to be completed in 2013.