City told to improve management of assets

Novan Iman Santosa, The Jakarta Post, Jakarta

The city administration was urged to improve its management of all city assets quickly to prevent loss and to increase city revenues, especially from those assets invested in the private sector.

The demand was expressed on Monday by the City Council Commission B overseeing trade and investment affairs during a plenary meeting to evaluate the 2002 City Budget.

"There is no clear regulation yet that states which office is responsible for managing the city's assets. Even the city assets office has failed to keep track," Commission spokesman Dani Anwar said in a prepared statement during the meeting.

"We also lament the office's explanation regarding the absence of certificates and other legal documents on city assets used or rented by private sectors," he added.

Dani emphasized that the condition had hampered the efforts to increase revenue from city-owned enterprises.

Currently, there are 52 city-owned enterprises with various statuses, ranging from 100 percent city-owned enterprises to joint ventures and other commercial businesses.

These enterprises have failed to contribute the expected Rp 64.99 billion (US$7.38 million) revenue to the 2002 City Budget, and the actual revenue amounted to only Rp 43.74 billion, or about 67 percent of the target.

A clear and efficient assets management is important, as the city administration itself is in the dark about its own wealth.

Head of the City Assets Office Rama Boedi said that Jakarta's total assets, consisting of companies and properties, were valued at more than Rp 7.9 trillion.

The City Council is currently drafting a bylaw on city assets management to provide a legal basis for the administration's management of its assets, especially against developers who refuse to build public facilities.

Monday's plenary meeting was the first to be presided over by council speaker Agung Imam Sumanto, who was installed before the budget plenary meeting.

Agung, from the Indonesian Democratic Party of Struggle (PDI Perjuangan) faction, succeeded Eddy Waluyo of the Indonesian Military/National faction, who had to resign as council speaker following his decision to run for governorship last year.

Separately, Azaz Tigor Nainggolan of the Jakarta Residents Forum (Fakta) told The Jakarta Post that the assets were forfeited on purpose to allow corrupt city officials to benefit by selling them to the private sector.

"The city-owned enterprises actually have great potential to generate a large amount of revenue for the city budget, provided that they are managed properly," he said.

"But the problem is they are managed by retired city officials instead of professionals who have solid business sense and skills."

Tigor said a high level of professionalism was crucial, because a business entity would seek to profit from its operation.

"Most of the joint venture companies use city assets, which means they also carry public aims, not only business ones.

"Poor management will only allow the private sector to reap high profits while sacrificing the city's assets," he explained.

Another problem with city-owned enterprises is that the city's share composition in joint venture companies, of which there are 11, tends to decrease with time.

The decrease is mainly caused by city administration's inability to inject fresh capital in the joint ventures.

"If the administration cannot provide capital to keep its share composition, it would have been better if the administration had not invested in the first place," said Tigor.

"It would be better to establish the companies as wholly city- owned, and manage them properly."