City enterprises face closure

Bambang Nurbianto, The Jakarta Post, Jakarta

The poor performance of city-owned enterprises in recent years has prompted the City Council to evaluate their performance.

Chairman of City Council Commission C for financial affairs, Daniel Adbullah Sani, said on Tuesday the evaluation would start in January after councillors finished the deliberation of the 2005 city budget.

"Forty state enterprises have contributed less than 1 percent so far to the city revenue. The amount is incomparable to the value of their assets, which reaches around Rp 50 trillion (US$5.49 billion). It's very disappointing," he told The Jakarta Post.

Next year's Rp 13.83 trillion draft city budget indicates that city enterprises are expected to contribute only Rp 103 billion of the total city revenue of Rp 11.78 trillion. The increase is only 0.95 percent higher than this year's contribution of Rp 102.43 billion.

Based on the draft budget, the contribution from joint venture city enterprises and private companies is estimated to drop to Rp 6.53 billion while the contribution from city-owned foundations will also drop to Rp 375 million.

The city revenue for 2005 is estimated to reach Rp 11.78 trillion or 6.94 percent higher than this year's Rp 11.01 trillion. The deficit will be covered by a Rp 250 billion reserve fund and Rp 1.9 trillion of unused funds this year.

Daniel said the evaluation would be used to decide which enterprises would remain operational and which would be closed down because they were a burden on the city administration.

"Based on the administration's reports, we can see which companies contribute less than the budget allocation for them," he said.