IPTN needs more than five years to turn around
IPTN needs more than five years to turn around
JAKARTA (JP): It will take more than five years to turn around
ailing state-owned aircraft maker PT Industri Pesawat Terbang
Nusantara (IPTN), a government official said yesterday.
Muhammad Faisal, a director of the newly established PT
Pakarya Industri, a holding company for 10 strategic industries
including IPTN, said that by boosting IPTN's profit centers such
as the airplane engine maintenance unit, the company could start
making a profit in five to six years.
IPTN, which was established by President B.J. Habibie 23 years
ago, has never made a profit. It has often been criticized by
many economists as an unrealistic project that only depletes
state resources.
IPTN reported a 1996 loss of Rp 153.83 billion.
In a January agreement with the IMF, the government committed
to cease budgetary support for IPTN.
Faisal also said that two other strategic industries were
considered not healthy, and each would need at least two years to
make them healthy.
The two are military equipment maker PT Pindad and engineering
firm PT Barata Indonesia.
"We will restructure them so that they can become profit
centers rather than cost centers," he told the media yesterday.
He said the other seven strategic industries were considered
healthy.
The seven other strategic industries are steel maker PT
Krakatau Steel, ship builder PT PAL Indonesia, explosives maker
PT Dahana, train equipment maker PT Inka, electronics
manufacturer PT Len Industri, engineering firm PT Boma Bisma
Indra and telecommunications equipment maker PT Inti.
But State Minister of the Empowerment of State Enterprises
Tanri Abeng told the House of Representatives last month that
Boma, Dahana and Len were also considered unhealthy.
The 10 strategic industries were previously under the
management of the Strategic Industries Supervisory Agency (BPIS),
a unit which was also headed by Habibie, who was then the state
minister of research and technology.
Since the establishment of the State Ministry of the
Empowerment of State Enterprises, the strategic industries and
more than 140 state-owned companies have become the
responsibility of Tanri.
Tanri's deputy Sofyan Djalil said the new holding company was
not intended to force the healthy strategic industries to cover
the losses of the ailing companies, pointing out that through the
holding company the strategic industries could create better
synergism.
Tanri is planning to raise US$1.5 billion from the sale of
state-owned companies during the 1998/1999 fiscal year to help
finance the state budget.
Sofyan said that although the government had managed to get
$14 billion in international aid to help plug the wide gap in the
1998/1999 state budget, the privatization proceeds would still be
needed because part of the aid was in the form of official debt
principal moratorium.
He added that not all of the 12 state-owned companies prepared
for privatization this fiscal year would be for sale, pointing
out that if three companies could provide the targeted $1.5
billion the remainder would not have to be privatized
immediately. (rei)