Ministers in dispute over state firm<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
A recent plan from the Office of State Minister of State
\nEnterprises to merge several under-performing state enterprises
\nhas received objections from some ministers, arguing that it
\nmight further undermine the performance of these firms.<\/p>\n
Minister of Forestry Malam Sambat Kaban, who is among the
\nministers opposed to the plan, said the structure of state
\nenterprises related to forestry-based industry should remain
\nunchanged since each of them engages in a specific field of
\nbusiness.<\/p>\n
\"Merging the firms may not do any good. It is not the solution
\n(to their poor performance). To restore their operations, we have
\nto give them more projects, such as restoring damaged forests,\"
\nhe said recently.<\/p>\n
\"I have met with Pak Sugiharto (State Minister of State
\nEnterprises) over the problem and requested the state enterprises
\nnot be merged and that they be maintained as they are now.\"<\/p>\n
Last week, Sugiharto revealed his plan to merge a number of
\nstate enterprises and set up holding companies to oversee smaller
\nstate firms in an effort to help restructure and revitalize them.<\/p>\n
Included in the plan is the merger of forestry based companies
\nPT Perhutani with PT Inhutani I to IV, which have combined total
\nassets worth over Rp 5 trillion (US$544 million).<\/p>\n
The forestry ministry claims to have the right to manage the
\ncompanies since they are closely tied with regulations on
\nforestry management.<\/p>\n
Rejection to the merger plan was also conveyed by Minister of
\nTransportation Hatta Radjasa, arguing that state firms would not
\nbe able to improve their performance without the assistance of
\ntheir technical ministries.<\/p>\n
Hatta opposed the plan to merge port operators PT Pelindo I to
\nIV and airport operators PT Angkasa Pura I to III and a number of
\nshipyard and sea transportation companies, as they were under his
\nministry's authority.<\/p>\n
Both Kaban and Hatta want the management of state firms to be
\nunder their ministries in a bid to increase their performance and
\nefficiency.<\/p>\n
However, Sugiharto argued that the transfer of state
\nenterprises into related ministries would in fact set back
\nimprovement in their performance since there was a lack of
\nsufficient management skill in the ministries and there was also
\nthe possibility of abuse emerging.<\/p>\n
\"We plan to discuss the problem with other ministries... I
\nthink they don't fully understand the aim of the mergers,\" said
\nSugiharto.<\/p>\n
\"If state enterprises are (managed) under their related
\nministries, we are going back to the New Order regime. We don't
\nwant to experience more abuse at the firms... We have to let them
\nbe subject to market regulation.\"<\/p>\n
Previously, state enterprises were controlled by related
\nministries. However, most of them were very poorly managed and
\nsuffered from very low rates of return due to the intervention of
\nvested interests, which often used the companies as cash cows for
\npolitical parties and for the personal benefit of officials in
\nthe ministries.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ministers-in-dispute-over-state-firm-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}