House responds to Merpati's rescue call
House responds to Merpati's rescue call
Urip Hudiono and Leony Aurora, The Jakarta Post, Jakarta
The House of Representatives has given its approval to the
government to rescue ailing state domestic airline Merpati
Nusantara from bankruptcy through the injection of Rp 450 billion
(US$45.7 million) in funds needed to restructure the carrier.
In a hearing on Monday, the House's Commission V overseeing
transportation, communications and public works, said the airline
was among the nation's most important assets, particularly in
providing transportation to the country's remote regions.
"We agreed to provide Merpati an initial fund of Rp 75 billion
in August to tide it over for a two-month period," State Minister
for State Enterprises Sugiharto, who attended the hearing with
Minister of Transportation Hatta Radjasa, said after the session.
"The funds will be taken from the proceeds of other state
enterprises and will be accounted for either in this year's next
state budget revision or next year's budget," he added.
The rest of the required budget would be allocated from next
year's state budget, the draft of which is currently being
deliberated by the House.
Sugiharto said that Merpati needed some Rp 450 billion before
the airline could commence a complete restructuring and
reschedule a whopping Rp 1.6 trillion in outstanding debts to
creditors and business partners.
Among Merpati's major creditors are Bank Mandiri (Rp 164
billion), Bank Danamon (Rp 95 billion) and the government (Rp 92
billion).
The bulk of the capital injection, or Rp 300 billion, will
finance downsizing, said Sugiharto. Another Rp 20 billion will be
used as additional working capital, while Rp 100 billion and Rp
30 billion will pay off immediate debts to vendors and banks,
respectively.
He also said that the funds for Merpati might also come from
private investors, hinting at the government's intention to
privatize the airline.
"There is also the option of getting the funds for Merpati
from any interested investors," he said.
Besides injecting the Rp 450 billion fund to restructure
Merpati, another life-saving option for the airline would indeed
be to offer it through a strategic sale to investors.
The government had also mulled dissolving Merpati altogether,
but it would need a whopping Rp 2 trillion in compensation for
the airline's workers.
Sugiharto, however, rejected the proposal that Merpati be
merged with national flag carrier Garuda Indonesia, as suggested
by several legislators, and reiterated that the two state-owned
carriers' restructuring would be conducted hand-in-hand.
"Garuda's Citilink flights, for example, should not compete
with Merpati's routes," he said.
Merpati's restructuring could also include a possible layoff
of thousands of employees to reach an ideal ratio to the number
of its airplanes. At present, Merpati operates a fleet of some 30
planes, down from 58 aircraft in its peak period.