City told to simplify joint venture running

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)