SOE restructuring ooposed<\/p>\n
Rendi A. Witular, The Jakarta Post, Hong Kong<\/p>\n
The government faces a daunting task in its efforts to
\nrestructure a number of underperforming state enterprises as a
\nresult of widespread opposition from executives desperate to
\npreserve their power and opportunities for personal enrichment.<\/p>\n
\"There is widespread opposition to restructuring in various
\nstate enterprises. This is because their managers are trying to
\nmaintain their interests and positions,\" said State Minister of
\nState Enterprises Sugiharto on Tuesday while accompanying Vice
\nPresident Jusuf Kalla on a business trip to China.<\/p>\n
He said the efforts to thwart reform could be seen from
\nattempts by executives to prevent the merger of underperforming
\nfirms so as to create more efficient enterprises.<\/p>\n
He added that the government would allow these executives some
\nmore time to carry out the ministry's merger instructions and to
\nexpand their businesses through what he termed \"non-organic\"
\nmeans, such as through acquisitions.<\/p>\n
However, the government's patience was not unlimited. Should
\nthe executives persist in their efforts to thwart reform or fail
\nto carry out the minister's instructions, they would be fired.<\/p>\n
The instructions in question were issued following the
\nadoption of a blueprint for the development of state enterprises
\nin February. Under the blueprint, the number of state enterprises
\nwill be reduced from 158 to between 100 and 120.<\/p>\n
Among the enterprises that are required to merge are fourteen
\nplantation companies (PT Perkebunan Nusantara (PTPN) numbers I to
\nXIV), four port operators (PT Pelindo numbers I to IV), four
\nairport operators (PT Angkasa Pura numbers I to IV) and four
\nforestry firms (PT Inhutani numbers I to IV).<\/p>\n
\"We understand that the reform of state enterprises cannot be
\ncompleted in one year. Due to the scale of the damage, we will
\ngive them enough time to carry out restructuring, including
\neffecting mergers. But they must do as they have been instructed
\nor they were definitely loose their jobs,\" said Sugiharto.<\/p>\n
He pointed to the recent debacle involving a plan by Bank
\nNegara Indonesia (BNI) to merge with a smaller rival, Bank
\nTabungan Negara (BTN), which was opposed by BTN management based
\non short-term considerations.<\/p>\n
\"How can BTN hope to finance increasing housing loans if its
\ncapital is inadequate? A merger would definitely entail long-term
\nbenefits for the bank. This is what the management doesn't want
\nto understand,\" he said.<\/p>\n
BTN is a state bank focusing on providing housing loans to
\nthose in the low- and medium-income brackets, while BNI is a
\nretail bank and is currently the nation's third largest lender by
\nassets.<\/p>\n
Another merger that was opposed by executives was that of the
\n14 PTPN companies, as the boards of a number of the companies
\nwere attempting to maintain their positions and the sort of
\ncorrupt practices they had grown used to, added Sugiharto.<\/p>\n
\"I can easily replace the managements for opposing the
\nmergers. But I have to ensure smooth transitions in order to
\nprevent other conflicts in the companies. So, we will give the
\nmanagements some time to see if they are committed or not,\" he said.<\/p>\n
At present, the management of PTPN numbers I to XIV are in the
\nprocess of conducting due diligence prior to merging their
\noperations. They are scheduled to appoint advisors for the merger
\nprocess later next month.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/soe-restructuring-ooposed-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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