Council: Sell city-owned firms that suffer continuous losses

JAKARTA (JP): City councillors suggested on Thursday that the city administration sell its companies which continue to suffer losses.

Chairman of Commission B on economic affairs Syarif Zulkarnaen Ginting revealed that the administration had spent too much money on the companies and gained too little profit.

"The assets of city-owned companies cost no less than Rp 13 trillion, but annually they only contribute about Rp 3.7 billion to the city's income, or 0.8 percent," he told a meeting with the city economic development bureau.

"It would be better if the government sold the companies and deposited the money in the bank," Syarif said.

He said the city administration had 30 companies and joint venture companies, but most of them continued to suffer losses.

He admitted, however, that some city-owned companies which serve the public, such as the water company (PAM Jaya), were not profit-oriented.

It is widely rumored that many city companies suffer continuous losses as they are used by certain officials as "cash cows."

Syarif said that two years ago, Commission B asked for due diligence reports on the city companies' performance.

"Last year the administration submitted reports on seven companies. But until today we have not received reports on the others," he said.

He said that the Commission needed the reports to evaluate the companies' performance.

Dameria Saragih, head of the city economic development bureau, said that the due diligence process had not been completed as it was quite complicated and also took time. He promised to give the reports soon after they were completed.

Syarif also urged the governor to keep his word and dismiss executives of companies which continue to suffer losses.

"If the directors fail to perform well and generate income within one year after they are assigned to the post, it would be better to dismiss them," he said.

In one case, he said, a city-owned company, which was expected to make money, suffered Rp 4 billion in losses within two years under the leadership of the same director.

Syarif also underlined that the city governor should not hold any post in city-owned companies, as this could give rise to abuses.

In May, Sutiyoso stated that he would not hesitate to dismiss executives of companies which suffered continuous losses and did not contribute to the city's income in the next few years.

Among the city-owned companies, only a few, including recreational operator and developer PT Pembangunan Jaya Ancol and market operator PD Pasar Jaya, are profitable. (06)