Govt to merge state firms<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
The government will merge a number of state enterprises and set
\nup several holding companies to oversee smaller state firms in an
\neffort to help restructure and revitalize state enterprises, the
\nmajority of which are in bad shape.<\/p>\n
State Minister of State Enterprises Sugiharto said the policy
\nwas taken to help improve efficiency and help each of the firms
\nbe a leader in its respective industry by controlling both
\nupstream and downstream businesses.<\/p>\n
\"The policy is to be implemented this year, but some of the
\nprocesses will need an initial study from independent
\ninstitutions and coordination with other ministries,\" he told a
\npress conference after the opening ceremony of the State
\nEnterprises Summit at the State Palace on Tuesday.<\/p>\n
Sugiharto said that from a total of 158 state firms as of last
\nyear, 54 of them would be merged into 21 while 38 would be
\nincluded in 10 holding companies and 66 would remain the same.<\/p>\n
According to the minister, companies to be merged include port
\noperators PT Pelindo I to IV, airport operators PT Angkasa Pura I
\nto III, timber firms PT Perhutani and PT Inhutani I to IV,
\nsurveyor firms PT Sucofindo and PT Surveyor Indonesia, and
\npension fund firms PT Jamsostek, PT Taspen and PT Jiwasraya.<\/p>\n
The mergers also cover companies engaged in shipyard,
\npharmaceutical, publishing, fisheries, construction, pulp and
\npaper and civil engineering businesses.<\/p>\n
State enterprises to be converted into holding companies
\ninclude oil and gas firm PT Pertamina, power firm PT PLN, gas
\ndistributor PT Perusahaan Gas Negara (PGN) and cement producer PT
\nSemen Gresik.<\/p>\n
The government will also form holding companies to oversee
\nmining companies such as PT Antam, PT Timah, PT Bukit Asam
\nBatubara and PT Sarana Karya, and for supervising plantation and
\nfertilizer companies.<\/p>\n
The holding companies will be tasked with forming new
\nsubsidiaries to support their core businesses upstream and
\ndownstream.<\/p>\n
In a bid to improve transparency and governance, the
\ngovernment will eventually sell shares of the holding companies
\nto the public via initial public offerings.<\/p>\n
\"The holding companies will provide a growth engine for the
\ncountry's economy by functioning as the government's investment
\narm and by integrating and complementing the businesses of each
\nstate enterprise,\" said Sugiharto.<\/p>\n
However, he added, the most daunting aspect of the plan was
\nthat most of the companies had been poorly managed for a long
\ntime and suffered from very low rates of return on investments
\nand equity due to the intervention of vested political interests,
\nwhich often use the companies as cash cows for political parties.<\/p>\n
President Susilo Bambang Yudhoyono underscored the need for
\nstate enterprises to be sold to the public or merged with other
\nstate firms in a bid to increase their value and lessen the
\nburden on the government in managing them.<\/p>\n
\"I have ordered Pak Sugiharto to select state firms that are
\nnot strategic or profitable to be privatized in order to reduce
\nthe government's risk and burden,\" he said in front of state
\nenterprise executives.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-to-merge-state-firms-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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