Efficiency measures seen improving bottom line of SEOs
Adianto P. Simamora, The Jakarta Post, Jakarta
Five state-owned enterprises (SOEs) have claimed that they were able to save some Rp 7.4 trillion (about US$810 billion) in operational expenses after efficiency measures were implemented in November 2001.
The five companies are: toll road operator PT Jasa Marga; port operator PT Pelabuhan Indonesia II (Pelindo); national flag carrier PT Garuda Indonesia; telecommunications firm PT Telkom and oil plantation firm PT Perkebunan Nusantara IV (PTPN IV).
Darmin Nasution, the director general of financial institutions at the Ministry of Finance, said on Thursday that the efficiency programs could further prevent hundreds of billions of rupiah in potential losses in the coming years.
"If the five companies continue to carry out the efficiency program as recommended by the auditors, they will save some Rp 740.56 billion a year," Darmin said.
The efficiency program is part of the government's reform program at a number of SOEs, which was agreed to with the International Monetary Fund (IMF).
The government appointed several independent auditors to audit the efficiency performance of five SOEs from 1995 to 1999.
The auditors then provided each company with recommendations that had to be carried out in order to improve their efficiency performance and help implement good corporate governance.
"The audit provided good momentum for the five companies to reform their operational systems," Darmin said.
The auditors were: Pricewaterhouse Coopers (PwC) and Hadi Sutanto & Co, which audited Garuda and Jasa Marga; Arthur Andersen and Prasetio Utomo & Co, which audited Pelindo II; and RSM International and Amir Abadi Jusuf & Co for PTPN IV and Telkom.
Telkom, for example, claimed that it had managed to save some Rp 5.2 trillion in operational costs from November 2001 to December 2002.
The company said that it had implemented several measures, including corporate restructuring and buying out the shares of several joint operation partners of the regional divisions in Sumatra and Kalimantan.
National flag carrier Garuda reported that it had saved Rp 120.3 billion.
Garuda claimed that it had so far improved 129 points out of the 205 recommended by the auditors.
Garuda incurred losses partly from operating unprofitable routes, such as to the United States and Europe.
According to its report, the company has cut several unprofitable routes, carried out corporate restructuring and set up a new crew base in Denpasar, Bali, in addition to Jakarta to help reduce costs in relocating crew members.
PTPN IV reported that it had saved some Rp 1.5 trillion after carrying out the corrective action recommended by the auditors.
Among the efficiency measures that were implemented were boosting the production capacity of palm oil and cocoa and improving the quality of the yields.
Meanwhile, Jasa Marga predicted that it would be able to avoid potential losses worth some Rp 6.4 trillion in the coming years if the efficiency measures were continued.
From November 2000 to December 2001, Jasa Marga saved some Rp 495 trillion.
One of the efficiency measures it implemented was terminating its agreement of the Jakarta Outer Ring Road (JORR) project with old investors who failed to live up to their financial obligations.
Meanwhile, Pelindo said that it could prevent further potential losses amounting to an annual Rp 77.3 million in the coming years.
The audit on the five companies was the second lot after the first audit was of oil and gas firm Pertamina, electricity firm PT PLN and the State Logistics Agency (Bulog).