Habibie to unveil plans to develop state firms
JAKARTA (JP): President B.J. Habibie is set to announce on Wednesday new basic plans for the development of state enterprises, including a plan to raise the salaries and benefits of company management, ahead of the June general election.
State Minister for the Empowerment of State Enterprises Tanri Abeng said on Tuesday that the plans were designed to boost the performance and value of state companies to reach international standards.
"The remuneration system is a very important part of the management system to boost the performance of state enterprises to be comparable to that of world-class operators," he told reporters after opening a seminar on state enterprises and the privatization program.
Tanri said further details would be provided after the plans are announced.
Sofyan Djalil, a deputy at the ministry, said the current salary system in state enterprises is not realistic for encouraging management to boost operations to world standards.
He mentioned as an example the CEO at state electricity firm PLN. He receives a monthly salary of Rp 10 million (about US$1,175) but is responsible for managing several billion dollars in assets and nearly 60,000 employees.
"We are currently designing a competitive renumeration and incentives system," Sofyan said, adding that the ministry had appointed a team of independent consultants for the task.
Toga Sitompul, president of state-owned Surveyor Indonesia, welcomed the proposal, saying it would raise the professionalism and ability of the management of state enterprises to an international level.
He said that under the new basic plans, the government would also introduce an institute for the development of corporate leaders.
"The professional standards at our state enterprises is far lower than the international average," said Toga, who will also be one of the executives of the institute.
Widigdo Sukarman, president of state Bank BNI, said efforts to raise the performance and value of state enterprises are important if the government's privatization program is to be successful.
He said "preparations" had to be made immediately so that state companies would be ready for privatization once the capital market regained stability.
The government is planning to privatize 14 companies in the 1999/2000 fiscal year in a bid to raise US$1.5 billion in cash.
The privatization candidates for the next couple of years have also been disclosed in the privatization blueprint.
Sofyan said that mining companies PT Tambang Timah and PT Aneka Tambang, plantation firm PT Perkebunan IV, and Soekarno Hatta international airport operator PT Angkasa Pura II were in the process of being privatized in the current fiscal year. (rei)