City council rejects plan for Jaya Ancol to go public

City council rejects plan for Jaya Ancol to go public

Ahmad Junaidi, The Jakarta Post, Jakarta

The City Council rejected on Wednesday city-joint venture
developer PT Pembangunan Jaya Ancol (PJA)'s plan to go public,
fearing that the plan would reduce city assets.

PT PJA, which manages the Ancol recreation park in North
Jakarta, is 88 percent owned by the city administration and 12
percent owned by property tycoon Ciputra.

"We fear that the plan to go public could be an effort by
Ciputra to get more shares in the company," councillor Dani Anwar
of the Justice Party told reporters after a hearing between the
council's Commission B for economic affairs and PT PJA
executives.

Dani, who is also the commission's secretary, claimed that
city assets had continuously decreased and had even been lost in
the administration's cooperation with Ciputra.

He revealed that Hotel Horison, which was previously mostly
owned by the administration, is now 60 percent owned by Ciputra's
company PT Pembangunan Jaya and 40 percent by the administration.

The Senen shopping center, which was previously fully owned by
the administration, is now owned by PT Pembangunan Jaya, he said.

The divestment of both Pasar Senen and the Horison was
conducted furtively without the knowledge of the City Council.

Councillor Agus Dharmawan of the National Mandate Party also
questioned the appointment of Ciputra's contractor PT Jaya
Konstruksi in the development of PT PJA's eight-story office
building worth Rp 43 billion (US$4.3 million) in Ancol two years
ago.

"It is unfeasible to build an office building during a
monetary crisis. It seems PT PJA gave work to Jaya Konstruksi,
which is its subsidiary," Agus said.

Meanwhile, PT PJA president Yahya Riabudi claimed that the
appointment of PT Jaya Konstruksi was conducted through an open
bid.

"Jaya Konstruksi does not always win bids, it has lost many,"
Yahya said.

He refused to comment on the company's plan to enter the stock
market.

PT PJA is often viewed as a cash cow for certain officials of
the administration and councillors.

Two years ago the company financed a controversial foreign
trip of dozens of officials and 15 councillors, which later
became known as Ancolgate.

Some suspect that the councillors have rejected the plan to go
public because they will no longer be able to benefit from the
company.

But Dani suggested that the company should be audited by a
public accountant to make it transparent like a public firm and
to avoid being used as a cash cow.

"If the problem is transparency, why don't we hire a public
accountant to audit the firm and announce the company's balance
sheet, like a public firm?" he said.