City ready to take over PPD after debt problems solved
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)