Government restructures state firms

Government restructures state firms

JAKARTA (JP): The government has started restructuring state- owned companies to improve their performance and competitiveness, Minister of Finance Mar'ie Muhammad said yesterday.

"There are too many state-owned enterprises that need to be restructured...in order to reach an ideal economic scale," Mar'ie told a hearing with the Budgetary Commission of the House of Representatives.

Indonesia currently has over 200 state-owned enterprises, with combined assets of over Rp 350 trillion (US$150.5 billion).

"I'm not happy with the current performance of most state- owned companies," Mar'ie told the commission.

Under the restructuring program, Mar'ie said, state-owned companies in the same sector would be merged or united under one holding company.

To kick off this program, the government on Monday restructured 16 state plantation companies, known as PT Perkebunan (PTP), by merging them into 14 entities to boost their efficiency.

The 14 plantation firms, renamed as PTP Nusantara I - XIV, were established with a paid-up capital of between Rp 300 billion and Rp 1.7 trillion each.

Minister of Agriculture Sjarifudin Baharsjah told journalists after the signing of the notary deeds for the 14 plantation entities that the restructuring was conceived to facilitate their future listing on stock exchanges.

"I hope that within the next two years, one or two of the 14 PTP Nusantaras will go public," Sjarifudin was quoted by Antara as saying.

The government is currently preparing a number of state-owned companies for privatization, including tollroad operator PT Jasa Marga, PT Krakatau Steel, electricity firm PT Perusahaan Listrik Negara, general mining firm PT Aneka Tambang and Bank Negara Indonesia 1946.

The government has so far privatized four state firms, PT Semen Gresik, telecommunication firms PT Indosat and PT Telkom as well as tin-mining firm PT Tambang Timah. The last three listed their shares on foreign stock exchanges as well as local ones.

Deregulation

Mar'ie said the government would soon deregulate state enterprises to make them compete with private firms.

"It is hoped that state firms will be able to conduct business more freely while remaining under control," Mar'ie said. "We used to have a state firm out of control -- oil company Pertamina."

He noted that the planned deregulation will cut bureaucracy at state-run companies. They will no longer be required to follow current procedures, which involve a number of related ministries.

At yesterday's hearing, the minister and the commission continued their deliberations on the amendment of the government's budget for the current fiscal year. The discussions on the amendment will end today.

Yesterday Mar'ie also disclosed that the government is currently working on new policies on investment and also on measures to curb imports.

He said the new policies on investment will treat domestic and foreign investments in essentially the same way.

"In this era of globalization, there are no distinct differences between foreign and domestic companies. The most important thing is how much they contribute to the country's economy," Mar'ie said.

Currently foreign investment in Indonesia is regulated under the 1967 foreign investment law, while domestic investment is regulated by the 1968 domestic investment law.

Speaking on measures to curb imports, Mar'ie said that the government is sounding out ways, in addition to Presidential Decree No. 19/1996, to promote the use of domestic products.

The decree recently established a special import monitoring team to make sure that the projects of the government and state- owned companies use as many local products as possible.

"I am now still working on the additional measures with the minister of trade and industry," Mar'ie said. (rid)