Government to accelerate sale of unprofitable, non-strategic state firms

Government to accelerate sale of unprofitable, non-strategic state firms

Rendi A. Witular, The Jakarta Post, Jakarta

The government is contemplating speeding up the sales of several
unprofitable and burdensome state enterprises, a minister says,
adding that the firms do not have any obligations to provide
public services and are not strategic in any way.

"We have too many state enterprises and most of them are not
contributing any benefit to the state. The government will no
longer maintain such companies since they are burdensome. We
should be realistic in seeing this issue," State Minister of
State Enterprises Sugiharto told reporters on Thursday.

The decision to accelerate the sales was taken at a meeting
between Vice President Jusuf Kalla and economic ministers
including Coordinating Minister for the Economy Aburizal Bakrie,
Minister of Trade Mari Pangestu, Minister of Transportation Hatta
Radjasa, Minister of Energy and Mineral Resources Poernomo
Yusgiantoro, Minister of Forestry MS Kaban and Minister of
Industry Andung Nitimihardja.

The meeting was a follow-up to the government's blueprint for
state enterprises that was arranged and issued by the Office of
State Minister of State Enterprises earlier this year. The
blueprint includes plans to merge and sell a number of companies.

Sugiharto said that of a total of 158 state firms, 10
contributed 80 percent of revenues to the state from state
enterprises. Last year, state enterprises recorded a combined net
profit of Rp 30 trillion (about US$3.2 billion) from assets worth
more than Rp 1,300 trillion.

However, not all profits went into the state budget since most
of the funds are used to capitalize development of the companies.

Sugiharto said it was the time for the government to remap the
function of the companies and decide which ones should be
maintained by the state and which sold to the private sector.

"My office will consult with other related ministries
overseeing technical affairs of state firms to decide which of
them should be maintained, downsized, merged or sold," he said.

The government will conduct a due diligence before selling or
merging the companies in a bid to gain maximum proceeds from the
process.

Sugiharto said that the government would keep its ownership of
state oil and gas company PT Pertamina as it was not only deemed
profitable but also strategic in ensuring energy supplies for the
nation.

"We will maintain the 10 largest and most profitable
companies, including Pertamina," he said.

The other nine are PT Telkom, Bank Mandiri, Bank Negara
Indonesia, Bank Rakyat Indonesia, PT Jamsostek, PT Aneka Tambang,
PT Kimia Farma, PT Perusahaan Listrik Negara and PT Perusahaan
Gas Negara.