Governor hails advise on share in companies

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)