BPIS views govt plans to dissolve it as normal<\/p>\n
JAKARTA (JP): State-owned holding company PT Bahana Prakarya
\nIndustri Strategis (BPIS) said on Monday it did not object to the
\ngovernment's plan to dissolve it, but added its subsidiaries
\nstill required coordination.<\/p>\n
BPIS president Surasno Paramajuda said he would not refute
\nthe government's allegation it was unable to manage the 10 state
\ncompanies, all in strategic industries, under its control.<\/p>\n
"We're a tool of the government, we simply do what they tell
\nus to do," Surasno said on the sideline of a hearing with House
\nof Representatives Commission IX for the state budget and
\nfinancial affairs.<\/p>\n
Surasno was commenting on the government's plan to dissolve
\nthe holding company on the grounds that it brought no added value
\nto its 10 subsidiaries.<\/p>\n
BPIS, which was established in 1989 as an agency for the
\ndevelopment of strategic industries, became a holding company in
\n1998 and currently supervises 10 state companies.<\/p>\n
The 10 state companies are aircraft manufacturer PT Industri
\nPesawat Terbang Nusantara (IPTN); ship manufacturer PT Pal; steel
\nproducer PT Krakatau Steel; weapons and ammunition producer PT
\nPindad; explosives producer PT Dahana; train manufacturer PT
\nIndustri Keretaapi (Inka); heavy industry company PT Barata
\nIndonesia; industrial equipment manufacturer PT Boma Bisma Indra
\n(BBI); telecommunications manufacturer PT Industri Telekomunikasi
\n(Inti); and electronic component producer PT Len.<\/p>\n
Surasno said BPIS had already appointed a foreign consultant
\nto audit its role and function, adding that it made the
\nappointment of its own initiative, not in response to the
\ngovernment's announcement the company would be closed.<\/p>\n
A number of the subsidiaries have reportedly expressed
\nsupports for dissolving BPIS, saying it failed to realize the
\nexpected synergy among them.<\/p>\n
However, Surasno said the state companies under BPIS had
\nshowed improvement, with only IPTN suffering losses in 1999. The
\naircraft manufacturer lost Rp 1.7 trillion (US$197 million) for
\nthe year.<\/p>\n
"We believe that the improved performance was due to the
\nsynergy that BPIS created," he told journalists, adding that
\nexcluding IPTN, the nine companies recorded a consolidated profit
\nof Rp 394 billion last year.<\/p>\n
Surasno warned that if the government allowed the 10
\nsubsidiaries to compete independently, they would become more
\nvulnerable to global competition.<\/p>\n
"I am not claiming BPIS is the only one capable of
\ncoordination, but whoever it is we must consolidate our
\nresources," he said.<\/p>\n
He said the 10 subsidiaries had different strengths and
\nweaknesses, which required coordination to create a synergy
\nwithin the strategic industries.<\/p>\n
Surasno further refuted claims the better performing companies
\nobjected to being grouped under BPIS because they did not want
\nthe agency use their funds to subsidize flagging companies.<\/p>\n
He said such cross-subsidizing had never been practiced among
\nBPIS' affiliates.<\/p>\n
He also said BPIS estimated IPTN to earn a profit of Rp 100
\nbillion this year, if the government was able to complete the
\ncompany's debt restructuring process.<\/p>\n
Revenue for the company is expected to come from the recent
\nconstruction of six CN 235 aircraft for Malaysia, he said without
\nciting the value of the contract.<\/p>\n
Furthermore, he said, ITPN was working on eight CN-235
\naircraft for South Korea, with delivery starting in 2001.<\/p>\n
At present, IPTN, along with Inti and Barata Indonesia, owe Rp
\n1.25 trillion in debt principal and another Rp 1.24 trillion in
\ninterest.<\/p>\n
The government placed the three companies under the control of
\nIndonesian Debt Restructuring Agency in March and December last
\nyear due to their inability to pay their debts. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bpis-views-govt-plans-to-dissolve-it-as-normal-1447893297",
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