Some 22 SOEs suffer US$2.4 billion in losses<\/p>\n
JAKARTA (JP): Director general of state-owned enterprises
\n(SOEs) I Nyoman Tjager said on Wednesday that some 22 SOEs
\nsuffered combined financial losses of Rp 27.78 trillion (US$2.40
\nbillion) last year.<\/p>\n
Tjager did not name the companies, but according to a
\ngovernment document, the largest loss was experienced by the
\nstate-owned electricity company PLN with total losses of around
\nRp 22.55 trillion, followed by investment bank PT Bahana (Rp 3.34
\ntrillion), Bank BTN (Rp 1.36 trillion), Merpati Nusantara
\nAirlines (Rp 145 billion), paper maker PT Kertas Kraft Aceh (Rp
\n61 billion), and plantation firm PTPN I (Rp 52.6 billion)<\/p>\n
"In fiscal 2000, some 22 SOEs were estimated to have suffered
\nfinancial losses," he told the House of Representatives'
\nCommission IX on the state budget and finance during a working
\nmeeting.<\/p>\n
In 1999, some 20 SOEs were reported to have suffered combined
\nlosses of Rp 47.65 trillion. Many of these SOEs were state banks,
\nwhich had been badly hit by the 1997 financial crisis.<\/p>\n
Tjager said that PLN suffered heavy losses because of the huge
\nburden resulting from power purchase contracts with independent
\npower producers (IPPs).<\/p>\n
Under these power purchase contracts, PLN must purchase power
\nfrom the IPPs at 6 U.S. cents per kWh, which is must higher than
\nits average selling price.<\/p>\n
The contracts were signed with 27 IPPs in the early 1990s to
\nanticipate growing power demand, but the 1997 economic crisis
\nslashed the demand for power and led to a plunge in the value of
\nthe rupiah, the currency in which PLN revenue is denominated.<\/p>\n
Tjager added that the low electricity prices in the country
\ncompared to other countries in the region had also contributed to
\nthe losses.<\/p>\n
"To resolve the problem, the government has initiated various
\nrestructuring measures including measures in the fields of
\nbusiness operations, debt, organization and human resources, as
\nwell as implementing good corporate governance," he said.<\/p>\n
Tjager said that the losses suffered by financial institutions
\nwere primarily caused by exchange rate losses, and negative
\nspread problems as interest rate income was lower than interest
\ncosts.<\/p>\n
He added that the losses experienced by plantation firms were
\nlinked to a significant drop in commodity prices, and the
\nunfavorable security conditions.<\/p>\n
Since the downfall of former authoritarian president Soeharto,
\nplantation firms have had to deal with land grabs by local people
\nand the looting of plantation crops.<\/p>\n
Tjager did not refer to the condition of the remaining 120
\nSOEs, but the government document said that they had only
\nreported combined profits of around Rp 8 trillion.<\/p>\n
Tjager also failed to explain the reason behind the financial
\nlosses suffered by Bahana.<\/p>\n
Coordinating Minister for the Economy Rizal Ramli had planned
\nto merge the loss making company with another state-owned
\nsecurities firm PT Danareksa Securities as part of the
\nrestructuring of Bahana.<\/p>\n
The merger as well as a management reshuffle was supposed to
\nhave been completed by the end of last month, but so far no
\nprogress has been reported.<\/p>\n
The government is planning to sell its shares in around 16
\nSOEs this year as part of the overall privatization program aimed
\nat raising around Rp 6.5 trillion to help finance the 2001 state
\nbudget deficit. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/some-22-soes-suffer-us24-billion-in-losses-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}