Bus company tries to stem burden of debt
JAKARTA (JP): In an urgent attempt to make up for the removal of a government subsidy next month, the state bus company PPD plans to sell some of its bus compounds and increase the daily rental fee charged to drivers.
The company's spokesman, Suryadi, said on Wednesday that some of its compounds, along with facilities such as workshops, are offered based on the current valuation for taxable assets.
"We have approached investors to purchase our 6-hectare bus compound in Kalideres and our 1.2-hectare site in Jelambar, both in West Jakarta, as well as our 3-hectare site in Cawang, East Jakarta," Suryadi said.
He said all of the assets on offer should be sold by the end of the month.
Suryadi admitted that some of these properties have no certificates, but the company expects to complete the certification process by the end of this month.
He refused to reveal the value of each site on offer.
In order to generate more revenue, the company, starting from Thursday, will increase the daily rental fee for regular buses, from the current charge of between Rp 350,000 and Rp 400,000, to an average of Rp 480,000. Meanwhile the rental of air-conditioned buses will increase from Rp 550,000 to Rp 650,000 per day.
He said the fees vary because consideration has been given to the fact that some drivers earn more than the others, depending on their route.
"It's a difficult decision (to increase the rental fee), as some employees refuse to follow the new rule. However, our management has reached an agreement with our staff (on Wednesday)," Suryadi said.
Last week, at least 200 drivers protested the plan to increase the daily rental fee, saying that they are being treated like milk cows for the benefit of the company. The protest, however, did not affect their daily operation as they continued to provide normal services.
The bus company serves commuters in Jakarta and surrounding areas with 5,100 staff and 454 operable buses servicing 67 routes across the capital.
There are 265 regular and express buses, and 189 air- conditioned buses. The company also rents 19 of its buses to private operators. In addition, it has 486 inoperable buses currently parked in its 16 bus compounds.
Suryadi said the government had given its last subsidy, amounting to Rp 6 billion for December 2000 and January 2001. The funds were distributed irregularly, based on the government's budget and the needs of the company.
Currently, the company's monthly revenue is about Rp 5 billion (US$ 526,315), while its expenditure is at least Rp 7 billion.
He hopes that with the increase of rental fees the company would earn approximately Rp 7.5 billion a month.
Suryadi said that Rp 3.5 billion is needed to pay the employees, while another Rp 3.5 billion is required for operational and maintenance costs.
"The oversized workforce and growing number of aging vehicles have been undermining our financial performance, resulting in huge and seemingly endless debts," Suryadi added.
He said that the number of employees will also be reduced.
Currently, each bus is operated by at least 10 employees, while five people are considered sufficient for the job.
He added that PPD's management has attempted to gradually reduce its workforce by offering attractive packages for those who wanted to take early retirement.
"Any employee retiring early would receive a golden handshake amounting to Rp 25 million," Suryadi said.
The monthly salary of drivers is between Rp 400,000 to Rp 700,000.
"We also plan to buy about 500 new buses this year, as we have not purchased any new vehicles since 1997 (when the economic crisis hit the country)," Suryadi said. (07)