City-owned firms exempted from making contributions

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)