Council urges sale of ailing city firms

Council urges sale of ailing city firms

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. (06)