Eleven city-owned firm to be privatized

JAKARTA (JP): The city administration will gradually privatize 11 city-owned companies in their effort to increase productivity and regional revenues.

Deputy Governor for Economic Affairs Tb. M. Rais said yesterday that the privatization program will soon begin with three of the eleven companies.

"The three companies to be privatized in the near future are Sarana Jaya, which is in charge of property construction, BPL Pluit in industrial area management and Wisata Niaga in hotel management," Rais said in a press conference.

The vice governor said that the three companies were chosen for the first round because they have fulfilled all the requirements to qualify for privatization.

Head of city economic affairs office Albert Napitupulu said that the requirements for privatization include profitability over the last two years, good management and adequate human resources.

"The plan to privatize the three firms has to get approval from the Ministry of Home Affairs," Albert said.

He expressed confidence that approval of the three companies will be given soon. The privatization process of the three firms will be completed in three years, he added.

Albert explained that the 11 companies overseen by the city administration this year have combined assets of Rp 2.9 trillion (US$1.31 billion). Their assets are projected to increase to Rp 3.6 trillion next year.

"The total profits of the 11 firms this year are projected to reach Rp 47.8 billion, up from Rp 30.4 billion last year. The profits are expected to jump to Rp 82 billion next year," he said without giving details.

Albert said that out of the 11 companies, only Pulo Gadung industrial estate authority, is not yet profitable.

Preparations for the privatization of the rest of the companies, including PD Pasar Jaya which in charge of market management, PAM Jaya in water, Bank DKI in banking and Dharma Jaya in slaughtering, are currently being made, he said.

"Only Bank DKI will not be privatized. The bank will go public by selling 10 percent of its shares on the local stock exchange," Albert said.

Rais also explained that the privatization plan has caused psychological problems among employees because many of them are reluctant to become private employees.

"Many employees are still hoping to reach higher career as civil servants," Rais said.

He explained that by changing their status to private employees status is expected to enable them to concentrate on ways of how to increase profits for their companies and make their companies competitive with other private firms. (yns)