Governor hails advise on share in companies

JAKARTA (JP): Governor Sutiyoso welcomed yesterday suggestions that the city sell its shares in nonperforming private companies to keep the city administration going in the economic crisis.

He said he would first assess each company's performance.

"I will first give them a chance to explain their performance. If they keep losing money, why should we keep our shares in them?" he told reporters after addressing a plenary session on the 1997/1998 city budget at the City Council.

Last week, city councilors proposed the governor sell the administration's shares in the companies and use the money to help overcome its financial hardships.

They also accused the Sutiyoso administration of withholding information on the number and performance of private companies in which it has shares.

At least 40 joint venture companies are currently listed in the administration's directory of names and addresses of government officials, departments, city-owned and joint venture companies.

As a result of the economic and political crisis, the city administration's budget for the 1998/1999 fiscal year has already been cut twice. From its initial level of Rp 3.2 trillion, the budget was cut to Rp 2.7 trillion and then to Rp 1.3 trillion (US$86 million).

A source said yesterday that Rp 1.3 trillion was unusually low and that a standard budget could not be less than Rp 1.5 trillion.

"With the Rp 1.3 trillion budget, the administration can only finance routine expenditures, such as employee salaries, and it has no money to fund development projects."

He said the possibility of deriving greater city revenue from vehicle ownership and property taxes was not reliable due to the sluggish business.

City revenue from the two taxes is projected to reach Rp 168 billion, he said.

In his speech yesterday, Sutiyoso stated that the administration had a net credit balance of Rp 22.11 billion originating from the 1997/1998 city budget. (ind)