City told to simplify joint venture running
JAKARTA (JP): A city councilor underlined yesterday the necessity to simplify management of the city's joint ventures with private companies in the campaign to whip them into better financial shape.
Head of City Council Commission B for economic affairs Djafar Badjeber urged the city administration to put management of the joint ventures under one roof with the City Investment Management Agency (BPIPM).
Entrusting the agency to handle the management was important to prevent any overlap in the ventures' supervision, Djafar said, adding that the current involvement of the City Regional Economic Agency (Binekda) in the supervision was redundant.
Due to the absence of clear-cut criteria and control mechanisms by the agencies, it was unsurprising that the administration was unable to fully monitor the development of companies' performances, he said without elaborating.
"To avoid any further confusion, the administration should improve BPIPM's role as the sole agency supervising the joint venture companies."
Data shows that of 48 registered joint venture companies owned by the city, 21 are under supervision of Binekda and the other 27 under BPIPM. "Actually there are still a number of other joint ventures, but it is unclear to which agency they have to report their performance."
Calculation
According to the calculation of the 1997/1998 city budget, only 11 joint venture firms provided no profit to the administration or made contributions in amounts far lower than projected.
Joint ventures whose contributions fell short were PT Pembangunan Jaya which deals with construction, PT Kawasan Berikat Nusantara (warehousing), PT Bumi Grafika Jaya (printing), PT Cemani Toka (paper ink), PT Alumindo Perkasa (aluminum products), PT Ratax Armada (taxi service) and PT Pakuan International (hotel, cottage and golf enterprises).
Those which gave no contribution at all were PT Determinan Indah (aluminum production), PT Abatoir Surya Jaya (frozen meat), PT Jaya Nur Sukses and PT Graha Sahar Suryajaya, both involved in the hotel business.
Djafar also urged the administration yesterday to revoke a joint venture agreement between PT Bumi Grafika Jaya with privately run PT Gesit Alumas because the terms were considered to cause losses to the administration.
He said the agreement, signed last year, gave PT Gesit much greater authority despite its limited shares.
PT Gesit's share reached only Rp 4 billion, compared to the Rp 43 billion put up by the administration, he said.
"Even though the administration has a bigger share, it has less of a role as is shown by the absence of city representatives in the board of directors. We only have three out of the five commissioners in the company.
"The percentage is not fair," he said. (ind)