Holding company, absurd!

Holding company, absurd!

From Bisnis Indonesia

State Minister of the Empowerment of State Enterprises Tanri Abeng has enthusiastically stated that he will set up a holding company from the present 159 state companies. He further said that with the establishment of this holding company, the value of state enterprises will increase by a certain percentage. This is absurd! How can a holding company enhance the value of the enterprises?

Tanri plans to hire foreign consultants to study the feasibility of establishing the holding company. My questions are:

1. Does the minister have the authority to change a fundamental case, if the benefit is still doubtful? If the minister carries out his plan, it will become a burden or a time bomb for the next government.

2. How many billions more rupiah of state funds will be sacrificed just to pay the expensive consultants, who will only produce formal justification?

3. Establishing a holding company will only create a financial burden for its subsidiary companies. And as a result, these companies are prone to suffer losses instead of making profits.

4. The plan to set up a holding company will only take us back to the 1970s era, to the greatest advantage for the organization only. In welcoming the third millennium, other enterprises tend to trim down their operations. Why on earth does the minister want to establish inefficient and complicated bureaucracy?

5. If supervision is the main concern, doesn't every state company have its own supervisory boards such as a supervisory council and an auditing division? And the government provides such audit agencies as the Development Finance Comptroller and the Supreme Audit Agency. So, do we really need more bodies of the same kind?

M. TANJUNG

Jakarta