IBRA launches overhaul plan to boost efficiency

IBRA launches overhaul plan to boost efficiency

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
announced a major overhaul including plans to cut down the number
of consultants.

IBRA chairman I Putu Gede Ary Suta said on Friday that the
changes were made as an effort to increase efficiency in the
agency and to speed up the disposal of assets.

"We've been accused of working too slow, we want to change
that," he said in a media conference here.

Ary Suta noted that almost one third of IBRA's expenditures
comprised payment for the large number of consultants working for
the agency. He cited that the Asset Management Credit (AMC) unit
of the agency alone budgeted Rp 700 billion (US$7.3 million) for
consultants.

In the new IBRA organization, to be made effective early next
week, all consultants would be centralized under a Consulting
Management Unit, which will reselect those to work for IBRA, Ary
Suta said.

"Any of IBRA's units wishing to use a consultant must choose
one of the consultants already in the CMU's list and the CMU will
draw a term of reference for it," he said.

The CMU is one of six new units introduced by Ary Suta for his
overhaul plan of IBRA.

The other five units are the appointment of a chief financial
officer (CFO), an asset disposal coordinator, a customer care
unit, general legal counsel and a litigation unit.

Besides the major changes taking place inside the agency
itself, Ary Suta said that he would also introduce changes to the
way the agency works.

Ary Suta said that to speed up the asset disposal program,
which had been criticized for being too slow, he would offer
indebted state enterprises a 25 percent reduction on their debt
principals and private corporate debtors a lower dollar rate to
prompt them to settle their debts this year.

State enterprises that owe debts of under Rp 1 trillion are
entitled to a 25 percent reduction on its principal debt when
paying in cash, he said.

"Furthermore, they are entitled to receive 100 percent
reduction for interest overdue and fines," Ary Suta added.

He said that in a meeting on Thursday with the director
general of state-owned enterprises, I Nyoman Tjager, at least 44
companies were entitled to the debt cut and that they should be
able to finalize their credits within two or three weeks.

Private corporate debtors would also be offered a lower dollar
rate, set at Rp 7,800 per U.S. dollar, for those wishing to pay
their debts by cash this year, Ary Suta said.

"This was considered an incentive and we've seen the number of
debtors making a cash settlement increase since our announcement
last month," he said.

Ary Suta said that he would also try to make the agency more
objective in its role by asking its senior management to let go
of their roles in banks and companies currently under IBRA's
supervision.

He said that he had noticed that many of IBRA's executives
were also holding managerial posts at several companies under the
care of the agencies.

"Some even have positions in seven to 13 companies," Ary Suta
said.

He said that the dual role of executives would only lead to a
conflict of interest, which should be avoided at all costs.

Ary Suta added that the executives would be given 14 days to
consider their move, whether to stay on as an IBRA executive or
whether to withdraw from the agency and assume a role in the
companies.(tnt)