INKA pressures KAI to pay debts

Yuli Tri Suwarni, Bandung, The Jakarta Post

Workers of state-owned train car maker PT Industri Kereta Api Indonesia (INKA) visited on Friday state-owned railway company PT Kereta Api Indonesia (KAI) to pressure the latter to repay its Rp 58.6 billion debt.

Five union members of INKA traveled from the firm's base in Surabaya, East Java, to meet union members of KAI in Bandung, West Java, on the possible repayment of the debt.

After the meeting on Friday, Suharyoko, INKA union leader, said that the unions of both firms agreed to arrange a meeting within two weeks for the management of both companies to discuss the debt repayment.

The Rp 58.6 billion debt results from KAI's failure to pay for 24 train cars built by INKA for the firm.

Suharyoko said INKA, with 900 workers, was facing difficulties in continuing its operations due to the lack of cash.

He said the 24 cars delivered to KAI had been built by INKA on a loan provided by state-owned Bank Mandiri, to which the firm must now pay Rp 800 million in interest per month.

"We have only Rp 3.2 billion in cash," he said, adding that the firm recently turned down an order from Australia due to its lack of operational funds.

KAI spokesman Patria Supriyoso said KAI was unable to make payment for the 24 cars because state-owned bank BNI was still withholding pledged credits to the firm amounting to Rp 50 billion.

"We are trying to ensure that the credits will be disbursed. BNI is reviewing the credit pledge for several reasons, including the (recent) management reshuffle (at BNI)," Patria said.

Following the 1997 economic crisis, many state-owned companies plunged into financial difficulties, mostly due to mismanagement. The government has implemented an ongoing privatization program to instill good corporate management into the companies.