Fri, 11 Apr 2003

Govt to dismiss 2,000 to restructure PPD

Fabiola Desy Unidjaja, The Jakarta Post, Jakarta

Adding insult to injury of the employees of state-owned Djakarta Transportation bus company (PPD), the government has planned to lay off about 2,000 workers as part of its efforts to improve the company's feasibility.

Minister for Transportation and Telecommunication Agum Gumelar said on Thursday that the dismissal would take place within the next six months, and added that the company would buy 150 new buses during the same period.

"To restructure the company, we have to buy more buses and reduce the number of employees," the minister said, adding that the restructuring was being supervised by the office of the State Minister of State Enterprises.

He said that currently, the company employed 12 workers to run a single bus, while the ideal number was five workers per bus.

"We have 450 operating buses and plan to buy 150 more," Agum said, and explained that this plan would improve the ratio of crews to buses.

The company has about 5,000 workers, but with the new arrangement, it would only need 3,000 workers to operate 600 buses.

"We have to do this to improve the performance of the company and to provide better public services for the people, and we need public support on this issue," Agum remarked.

His comment came a day after PPD workers went on strike to protest the company's inability to pay their salaries for the last three months.

In response to the strike, Minister of Manpower and Transmigration Jacob Nuwa Wea planned to hold a meeting between PPD employees and management on April 14.

Wednesday's strike was the latest incident in the prolonged dispute of the company, which has suffered many losses and is renowned for providing substandard public service.

The central government once proposed to the Jakarta administration to take over the company, but the city was reluctant to accept the proposal, as they would also be taking over PPD's huge loans.

Agum said that the government needed about Rp 190 billion (US$21.6million) to finance the restructuring and that the money would be raised by selling several assets of the company.

"For severance pay, the company needs around Rp 100 billion, while it needs Rp 30 billion to buy buses and Rp 33 billion to pay the employees' monthly salaries, and the remaining balance for supporting the six-month restructuring program," Agum said.

He said the asset sales was expected to generate about Rp 200 billion for the government.