City ready to take over PPD after debt problems solved
JAKARTA (JP): City administration said it was ready to take over the management of state-owned public bus operator PPD, providing the Ministry of Transportation clears the company's huge debt.
"When you hand over a company, you should settle all its problems first. The city administration do not want to be burdened with PPD's debt problem," city administration spokesman Muhayat told The Jakarta Post over the weekend.
Muhayat said that in a recent meeting with the Ministry of Transportation, Governor Sutiyoso asked the ministry to provide a detailed report of the company's financial and management situation.
Muhayat said the city administration is going to establish a team to look into the possibility of taking over the management of PPD.
Minister of Transportation Agum Gumelar told Antara on Friday that the Ministry of Finance, which is the sole stakeholder, will hold a meeting with PPD to discuss the company's continuing deficit next week.
"Thus, when PPD is taken over it will not burden the city administration," said Agum.
PPD has been in the red for the last 16 years due to mismanagement, its obligation to provide cheap public bus service and its oversized workforce.
As of last year, the company had suffered a loss of Rp 400 billion (US$44 million). It still has to rely on government subsidies amounting to Rp 2.3 billion a month to cover its Rp 8 billion monthly expenditure.
The Ministry of Transportation had planned to liquidate the company, claiming the government could no longer provide the subsidy. But later the plan was canceled due to research that claimed the company could still be saved.
Speaking separately, PPD's Director of Finance A. Muchlasin claimed the government had never invited them to discuss the handing over of his company to the city administration.
"It concerns our fate. The government is supposed to take into account our voice," Muchlasin remarked, adding that he regretted the government's action to exclude the PPD from the discussions of its fate.
He stressed that the first thing to do with the company was to make it healthy. "After that we can talk about options, whether to hand it over to the city administration or merge it with another state-owned company," he told the Post.
The company operates 454 public buses, which serve 67 routes in the capital. The public buses consist of 265 regular and express buses and 189 air conditioned buses. It also rents 19 buses to private operators. The company has 489 inoperable buses left idle in its 16 bus depots.
Muchlasin said that the oversized workforce had also undermined the company's performance.
Agum said that to make it efficient the government would have to gradually halve PPD's workforce of 5,000.
He said to keep the company afloat, it had raised its service charges and rental fees, planned to sell some of its assets, intended to merge with other state-owned firms, in particular, public bus operator Damri. (07)