Govt plans to deregulate state firms

Govt plans to deregulate state firms

JAKARTA (JP): The government will deregulate state-owned
enterprises to prepare them to compete with private firms,
Minister of Finance Mar'ie Muhammad said yesterday.

Speaking at a hearing with the budgetary commission of the
House of Representatives, Mar'ie said that the planned
deregulation will cut "paper" procedures for state-run companies.

Mar'ie said that after the deregulation state-owned
enterprises will no longer be required to follow the current
procedures, which involve a number of related departments.

"In preparing their financial reports, for instance, state-
owned companies will follow a one-step mechanism through internal
audits as is the case with privately run enterprises," Mar'ie
said.

Director General of State-owned Companies Bacelius Ruru said
yesterday his office was drafting the deregulation moves, which
are expected to be announced next year.

A number of legislators have questioned the government's
seriousness about improving state-owned companies, especially
those which continually suffer losses.

"Just look at the Jakarta-based, city-owned PPD transit
service, which has recorded losses for several years. To me, it
seems irrational that PPD should suffer losses every year," Muba
Kahar Muang, a legislator of the ruling Golkar political
grouping, said.

Muba, a former director at one of Jakarta's best taxi firms,
offered her services to PPD to make the company a profitable
firm.

"Just give PPD to me, I'll help make it a profitable
enterprise. I have already made some calculations," Muba said.

Responding to the criticism, Mar'ie said that the public
should understand that state-owned enterprises shoulder a double
burden, the mission of catering to the people's interests and the
mission of collecting profits.

Not fair

"When their feet are tied together like now, it is not fair to
ask them to compete with privately-owned firms," Mar'ie said.

He cited the fact that a number of state-owned firms overseen
by the Ministry of Forestry had been assigned to open industrial
timber estates in remote areas for transmigrants from Java. It
would be impossible for any private company to accomplish such a
task, Mar'ie said.

"Any private enterprise tries their best to run a business
which promises high returns with least possible risks. But it is
not the case with state-owned companies," Mar'ie said.

The minister said the government, as the shareholder of state
firms, must be the one to sacrifice for the interests of the
people. "If not the government, who else?"

Mar'ie said the government is committed to allowing state-
controlled companies, especially those directly related to the
public's interests, to retain 30 percent of their net profits for
expansion programs. (rid)