City-owned firms exempted from making contributions
JAKARTA (JP): The city administration has exempted several city-owned companies from making contributions to the revenue office as their profits have dropped sharply due to the effects of the economic crisis, an official said on Thursday.
"The obligation to make contributions is only imposed on companies which make good profits," Deputy Governor for Development Affairs Budihardjo Sukmadi said.
Without elaborating on the companies' financial condition, he just said, "What's important is that we have audited the companies."
On Wednesday, city councilors questioned Governor Sutiyoso's statement made when he submitted the 1999/2000 draft budget to the city council that tap water company PDAM Jaya, construction company PT Pembangunan Jaya and brewing firm PT Delta Jakarta might not be able to make financial contributions to the city.
Budihardjo said that the administration decided not to force PDAM Jaya to make a contribution in order not to prompt a tap water tariff hike.
"We have decided that the tariff won't be raised up to the year 2000," he said.
Pembangunan Jaya and Delta Jakarta were not asked to make contributions as their profits have dropped substantially.
Budihardjo said that exempting the companies from temporarily meeting their obligations was considered a wise decision.
Head of the Indonesian Democratic Party Lukman Mokoginta said on Thursday that it was impossible that PDAM Jaya was unable to make a profit after cooperating with foreign companies.
"I think no companies would want to cooperate with a city company if it doesn't make a profit. So please, be transparent," he said.
PDAM Jaya cooperated with French company Suez Lyonnaise des Eaux to form Pam Lyonnaise Jaya and with British company Thames Water Overseas Ltd. to set up Thames Pam Jaya to manage tap water supplies in the city early last year.
According to the city administration data, there are 40 city- owned companies. Revenues from these companies are projected to reach Rp 55.52 billion in the 1998/1999 fiscal year, down from Rp 61.39 billion in 1997/1998.
In a related development, PDAM Jaya head Rama Boedi announced on Thursday a plan to change his company's status into that of a limited liability company to enable it to be more flexible and competitive.
"We plan to merge with water companies in Tangerang or Bekasi," he said.
He said that the merger was mainly aimed at improving public service.
A similar status change was implemented by the city-owned Bank DKI earlier last month. (ind)