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)