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.