'Govt should liquidate state trading firms'<\/p>\n
JAKARTA (JP): A member of the House of Representatives
\nyesterday suggested that the government liquidate money-loosing
\nstate-owned trading companies because they will never survive in
\ncompetition with private and foreign corporations.<\/p>\n
\"State-owned trading enterprises that have suffered losses for
\nseveral years should be abolished, because they will continue
\nincreasing the financial burdens of the government. In addition,
\ntheir businesses do not concern the basic interests of the
\npublic,\" Iskandar Mandji of the House's Commission VI told a
\nhearing with Director General of Domestic Trading Djoko Moeljono
\nhere yesterday.<\/p>\n
The country's constitution stipulates that all production and
\nbusiness activities which pertain to the basic interests of the
\npublic must be controlled by the state.<\/p>\n
The government currently supervises four state trading firms
\n-- PT Cipta Niaga, PT Kerta Niaga, PT Dharma Niaga and PT Pantja
\nNiaga -- which run export-import and domestic distribution
\nbusinesses.<\/p>\n
\"They are competing with each other in the same businesses,\"
\nMoeljono said.<\/p>\n
He told the hearing that Cipta Niaga is the worst among the
\nfour, with significant losses in the last seven years.<\/p>\n
He said Cipta Niaga suffered before-tax losses of Rp 608
\nmillion in 1989 (US$258,000 at current rate), Rp 4.9 billion in
\n1990, Rp 6.4 billion in 1991, Rp 5.3 billion in 1992, Rp 6.9
\nbillion in 1993, Rp 4.8 billion in 1994 and Rp 2.5 billion in
\n1995.<\/p>\n
He added that Dharma Niaga is the best among the four, which
\nimproved its performance after suffering losses of Rp 2.8 billion
\nin 1989 to gain a profit of Rp 5.3 billion in 1995.<\/p>\n
The chief executive of Cipta Niaga, Eddi Gunadi, told the
\ncommission -- which supervises industry, mining, manpower and
\ninvestment -- that his company's businesses are highly risky and
\nfrequently mismatched in terms of supply and demand.<\/p>\n
For example, he added, Cipta Niaga obtains credits from its
\nsuppliers for only two weeks, while consumers usually pay four
\nweeks later.<\/p>\n
\"So ... Cipta Niaga must pay bank interest rates to cover the
\ntransactions,\" said Gunadi.<\/p>\n
Moeljono told the commission that an interministerial
\ndiscussion on the fate of the trading firms is underway.<\/p>\n
\"Consolidation or selling the trading firms to private parties
\nare among the alternatives,\" said Moeljono.<\/p>\n
He expected his superior -- Minister of Industry and Trade
\nTunky Ariwibowo -- to inform the commission on the matter in a
\nhearing later this month. (kod)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-should-liquidate-state-trading-firms-1447893297",
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