Minister Agum reveals huge layoff plan in PPD
Minister Agum reveals huge layoff plan in PPD
JAKARTA (JP): The Minister of Transportation and
Telecommunication Agum Gumelar revealed on Friday a plan to
reduce the number of employees in state-run City Bus Company
(PPD) as the company has, for the past 15 years, been suffering
losses.
"Initially, there was a plan to liquidate PPD, but our
research indicated that the bus company could be saved. The
government should take steps to establish an ideal ratio of the
number of employees to the number of buses," Agum said at the
ministry.
He said reducing the number of employees is imperative in
improving the company's performance.
The minister said the government could no longer cover the bus
company's losses due to the limited financial capability of the
state.
"We can only go on paying the employees for the next few
months. We should find a solution quickly," Agum said.
The ministry is reluctant to fully support the bus company
since there has been no satisfactory explanation on why the
company has been continuously suffering huge losses, the
ministry's secretary-general Anwar Suprijadi added.
"It is still unclear whether the losses are caused by
inefficiency in the company or because we have been bowing to
public demands," Anwar said.
Besides inefficiency in its management, many analysts believe
the losses are also due the low bus fares. The state bus company
is obliged to provide cheap transportation for the masses.
Meanwhile, PPD president Anton Sudarto admitted that the
company was still suffering losses despite a restructuring in the
company's management.
Anton said the government had to give the company a total of
Rp 105 billion (US$11 million) between early 1999 and September
2000 because of its heavy losses.
In 1998, the company was given Rp 42 billion to cover its debt
and operational costs which amounted to Rp 35 billion.
The company suffered losses of Rp 6.4 billion in 1985, Rp 28
billion in 1995 and Rp 20.7 billion in the first quarter of last
year.
The losses, according to the ministry's inspectorate general,
have been caused by irregularities in the company's budget.
To improve its performance, the company's management is
currently planning to launch a program to reach an ideal ratio of
five employees to every bus.
PPD, which has 5,560 employees, is planning to increase its
bus fare and add 550 more buses to reach the ideal ratio.
Four countries reportedly have offered their buses, namely,
Czechoslovakia, Hungary, Japan and South Korea.
PPD currently owns 861 buses which consist of 560 economy
class buses and 301 air-conditioned buses, but only half them are
operating in the city as the rest are out of commission.
In October last year, the company's employees went on strike
to demand their insurance and pension funds worth Rp 13 billion
in total. The strike caused no serious problems to the company.
(tnt/jun)