Council unhappy with joint venture records

Council unhappy with joint venture records

JAKARTA (JP): The city council has demanded that the
administration review its business partnerships with private
enterprises because many of them are money losing.

The head of the council's Commission C for financial affairs,
Amarullah Asbah, said Sunday the partnerships did not generate
sufficient profits for the city's coffers.

Some of the 25 joint ventures generate no revenue for the city
at all, he said.

"I think the administration should stop partnerships with
money losing companies or find ways to improve their
performance," Amarullah said.

The joint ventures generated Rp 10.78 billion in revenues for
the city in the 1997/1998 fiscal year.

Two of the joint ventures currently yielding no revenues for
the city are PT Bumi Grafika Jaya, a printing business, and PT
Abattoir Surya Jaya, a frozen meat supplier, he said.

"Every cent the administration has at stake ought to result in
profits that go into its coffers. This is important, especially
in this time of (economic) crisis," he noted.

The economic turmoil has forced the administration to slash
its budget 10 percent to Rp 2.79 trillion (US$279 million) for
fiscal 1998/1999 from Rp 3.2 trillion last fiscal year.

The drop in the annual budget is the first over the past 32
years.

PT Bumi Grafika Jaya has been losing money because it is
unable to compete with private printing companies, Amarullah
said.

"The company has no future. The monetary crisis has catapulted
the price of paper. How can it possibly survive?"

He said it would be better if the company's 4,500 square meter
plot of land on Jl. MT Haryono in South Jakarta, where a square
meter sells for Rp 3 million, was used for a more productive
application.

He said PT Abattoir Surya Jaya also was not productive for the
administration.

"What is the benefit of maintaining those money losing
companies?" he said.

Amarullah said the administration shared the blame for the low
profit yields because it placed retired officials with little
managerial skills in the companies.

"So it's possible that the private company executives are more
dominant in the decision-making process than the officials
representing the administration," he said.

"It's time for the administration to insert representatives
capable and knowledgeable about business (into the companies) to
improve its leverage (in the joint ventures)," he added. (ind)