Government plans to sell unprofitable SOEs<\/p>\n
Rendi A. Witular, The Jakarta Post\/Jakarta<\/p>\n
As part of the major restructuring of all state-owned
\nenterprises (SOEs), the new government plans to sell or close
\nthose considered to be in bad shape and with no business
\nprospects, according to a senior official.<\/p>\n
Mahmuddin Yasin, deputy for privatization at the Office of
\nState Minister of State Enterprises, said the policy was part of
\nthe government's planned \"SOEs blueprint\" aimed at efficiently
\nmanaging state companies for the next five years.<\/p>\n
\"SOEs with poor performance, a lack of business prospects and
\nhave no public-service obligations will no longer be maintained
\nby the government. They will either be sold or shut down,\" said
\nMahmuddin.<\/p>\n
He explained that SOEs that were still considered to have
\nbusiness prospects but poorly managed would undergo a
\nrestructuring program by merging them or injecting fresh capital
\nfrom public investors.<\/p>\n
Many of the country's SOEs have been poorly managed for a long
\ntime and suffered very low rate of return on investment and
\nequity due to intervention by vested political interests, which
\nhave often treated the SOEs as cash cows.<\/p>\n
The previous government of Megawati Soekarnoputri planned to
\nshut down or merge a number of poorly managed SOEs, including
\nforestry firm PT Inhutani I to V, railway construction firm PT
\nInka, paper firms PT Kertas Leces and PT Kertas Kraft Aceh,
\nfertilizer firm PT Pupuk Sriwidjaja, shipping firm PT Pelni and
\naircraft maker PT Dirgantara Indonesia.<\/p>\n
However, the administration has thus far only merged trading
\ncompanies PT Pantja Niaga, PT Dharma Niaga, PT Cipta Niaga, PT PP
\nBerdikari and PT Sarinah; and construction consultancy firms PT
\nVirama Karya, PT Indah Karya, PT Indra Karya, PT Yodya Karya and
\nPT Bina Karya.<\/p>\n
It decided last month to close down PT Aceh Asean Fertilizer,
\nalthough a final decision has yet to be made by the new
\ngovernment and the governments of the Philippines, Singapore,
\nThailand and Malaysia, as investing partners in the firm.<\/p>\n
SOEs with public-service obligations have also been a victim
\nof mismanagement. Most of the companies have been forced to
\nprovide public services without sufficient facilities and
\nsubsidies from the government.<\/p>\n
The companies have been forced to make a profit, causing the
\npublic to bear expensive costs to use their services. Among these
\ncompanies are electricity firm PT Perusahaan Listrik Negara, oil
\nand gas company PT Pertamina, postal and courier firm PT Pos
\nIndonesia, railway firm PT Kereta Api Indonesia, bus companies PT
\nPPD and Perum Damri, and a number of hospital and seaport
\noperators.<\/p>\n
Mahmuddin said SOEs with public-service obligations, which
\nwere mostly in poor condition, would be maintained by providing
\nthem with subsidies and other facilities that could support the
\ncontinuity of their operation.<\/p>\n
\"SOEs with public-service obligation will be restructured by
\nthe government to efficiently serve the public. In the SOEs
\nblueprint we will clearly define and separate such companies from
\nthose of profit-oriented SOEs,\" said Mahmuddin, who was involved
\nin drafting the blueprint and is likely to be reappointed again
\nas a deputy to the minister.<\/p>\n
Under the planned blueprint, the new government is also
\nplanning to form a holding company that it is hoped would be more
\nefficient in overseeing SOEs, similar to Singapore's government
\ninvestment arm Temasek.<\/p>\n
If the plan is realized, executives of the holding company
\nwill be in charge of managing 162 companies, with combined assets
\nof more than Rp 700 trillion (about US$77 billion).<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-plans-to-sell-unprofitable-soes-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}