BUMN must benefit the public

The management of every company, including state-owned enterprises (BUMN), is obliged to endeavor to achieve its target and thereby obtain a favorable appraisal of its performance.

Nevertheless, all BUMNs must accord the national interest top priority.

The success of a BUMN should not be detrimental to society otherwise such success will be deemed a major failure of the management concerned in operating the company to the benefit of the public.

A reduction in the quantity of natural gas supplied to the PT Pupuk Kaltim plant at Bontang by Pertamina could result in damage to the national economy because the unavailability or shortage of urea fertilizer might cause a decline in the rate of rice production and hence farmers' welfare.

Fundamentally it would be an avoidable occurrence if either Pertamina or PT Pupuk Kaltim could agree on a reasonable price formula for natural gas based on a mutual understanding that both were established to serve the public to the best of their ability.

Even though Pertamina strongly denied the allegation that such reduction is attributable to the inability, hitherto, to reach an agreement, it is very hard to envisage a resolution in the short term, given that the price in the export market is higher than it is in the domestic market. That is the crux of the issue.

The government has many options to overcome the prolonged crisis, one of which is to issue a government regulation regarding the transfer of a certain percentage of PT Pupuk Kaltim shares by PT Pusri to Pertamina and a formula for a fair price for natural gas delivered to the PT Pupuk Kaltim plant. In such a way a workable business relationship between the two strategic enterprises would be maintainable, which could enable PT Pupuk Kaltim to achieve its optimal target.

The construction project for the East Kalimantan fertilizer plant was drawn up by Pertamina but in 1977, based on a government regulation, it was switched to the industry ministry and at present PT Pupuk Kaltim is a subsidiary company of PT Pusri.

The public, especially farmers, are waiting for a reliable stock of urea fertilizer at a guaranteed moderate price. We wish the government would take a firm decision immediately to end the current crisis.

HASAN BASRI MUCHTAR, Jakarta