Govt mulling over whether to liquidate PPD<\/p>\n
JAKARTA (JP): The government has agreed to provide state-owned
\nbus company PPD with Rp 6.9 billion (US$690,000) in new subsidies
\nto help it pay its workers' wages for the next three months
\npending a decision on whether or not to liquidate the ailing
\ncompany, a minister said.<\/p>\n
Minister of Transportation and Telecommunications Agum Gumelar
\nsaid at a hearing with the House of Representatives' Commission
\nIV for infrastructure and transportation on Wednesday that the
\nfinancial state of the bus company, which operates in Jakarta and
\nsurrounding areas, was so poor that it could not even pay its
\nworkers.<\/p>\n
He said that at a meeting on Monday, his ministry and the
\nMinistry of Finance had agreed to provide PPD with Rp 2.3 billion
\nper month as a subsidy to pay its workers' salaries starting this
\nmonth.<\/p>\n
He said that within three months, an independent team
\nappointed by the Ministry of Finance would complete a study on
\nwhether to liquidate the firm or to allow it to continue in
\nexistence.<\/p>\n
Director General of Land Transportation Susmono Soesilo said
\nthat a previous interdepartmental team had came up with two
\noptions; to liquidate PPD or to rehabilitate it.<\/p>\n
\"Both the options have pros and cons and these will be studied
\nin greater depth by the new independent team,\" he said during a
\nbreak in the hearing with the House.<\/p>\n
Susmono said that if the decision taken was to liquidate the
\nbus company, then the government would have to spend at least Rp
\n330 billion to pay, among other things, severance pay for the
\n5,500 laid-off workers.<\/p>\n
However, if it was decided to rehabilitate the company, then
\nin the short term it would cost the government about Rp 68
\nbillion to refurbish some 300 buses, and to pay off outstanding
\ndebts and cover operating costs, he added.<\/p>\n
The interdepartmental team had consisted of the Ministry of
\nTransportation and Telecommunications, the National Development
\nPlanning Board (Bappenas), the Jakarta administration, as well as
\nthe Ministry of Finance.<\/p>\n
Agum suggested that the bus company should not be liquidated
\nbecause of its important role in providing cheap public
\ntransportation.<\/p>\n
He said that on top of PPD's approximately 454 buses, Jakarta,
\nideally speaking, still needed around another 10,000 buses to
\ncope with the transportation needs of its populace.<\/p>\n
The company operates 265 regular and express buses and 189
\nair-conditioned buses on 67 routes across the capital. In
\naddition, it has 486 unusable buses currently parked up in its 16
\nbus depots.<\/p>\n
PPD has come under close scrutiny as the company has been
\nsuffering losses and been regularly unable to pay its employees'
\nwages over the past 15 years.<\/p>\n
In February, the company was short Rp 2.3 billion to pay its
\nemployees.<\/p>\n
The company suffered losses of Rp 6.4 billion in 1985, Rp 28
\nbillion in 1995 and Rp 20.7 billion in the first quarter of 1999.<\/p>\n
It is unclear whether the losses are caused by the company's
\ninefficiency or because of the low fares it is required to charge
\npassengers.<\/p>\n
PPD director of finance A. Muchlasin R. said the company's
\noversized workforce and growing number of aging vehicles have
\nbeen undermining the company's financial performance, which has
\nresulted in huge and seemingly endless debts.<\/p>\n
\"We have about 5,500 workers, while the existing 500 buses
\nneed only 2,500 men to operate them,\" he said during a break in
\nthe hearing.<\/p>\n
Susmono said that one of the ways to help PPD get back on its
\nfeet would be for it to enter into cooperation with a private
\ncompany.<\/p>\n
Muchlasin said the company was expecting to sign a contract
\nwith local assembler PT Volgren Indonesia, which would allow the
\nlatter to provide and operate 100 buses on a revenue-sharing
\nbasis with PPD.<\/p>\n
\"We will only need to provide the designated routes, the PPD
\nbrand name, and 75 percent of the human resources,\" he said.
\n(tnt)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-mulling-over-whether-to-liquidate-ppd-1447893297",
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"sponsor": "Okusi Associates",
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