PPD badly needs overhaul not new management

PPD badly needs overhaul not new management

JAKARTA (JP): The 46-year-old PPD city bus transportation
company urgently needs government intervention in handling the
firm's oversized workforce and the growing number of aging
vehicles, its spokesman said.

"These two problems have been undermining PPD financial
performance for so many years the result has been huge and
seemingly endless debts," spokesman Suryadi said in an interview
with The Jakarta Post at his office on Thursday.

According to him, handling these two chronic problems properly
would be better than handing over the state-owned PPD to a third
party, be it the Jakarta Administration or a private operator.

"Giving it to another party won't solve the core problem since
the company's financial report is still negative," he said.

Suryadi suggested that the government should reduce the
mammoth number of PPD employees, particularly the bus crews.

"Right now, each of our buses are handled by at least 10
employees, which is really a burden to the company," Suryadi
said, referring to its 5,500 staff and some 500 operable buses.

The firm, he added, hoped the ministry of transportation,
which currently manages the firm, could cut at least half of the
employees to a ratio of bus/staff of 1/5.

For years, Suryadi explained, PPD management has attempted to
gradually slim its workforce by offering attractive packages for
those who wanted to take earlier retirement.

Any employee retiring early would receive a golden handshake
equal to 46 times their latest monthly salary, which ranges
between Rp 400,000 (for drivers) and Rp 600,000 (for
administration staff).

"But the money we had for the scheme was limited and most of
it was taken from debt we borrowed from a third party, such as a
pension fund company," he said.

As a result, debt has remained a serious problem from year to
year.

In the period from August 1998 to July 2000, a total of 3,194
employees accepted the offer, Suryadi said.

PPD also has to spend huge sums every year for the maintenance
and operation of the 500 running buses and another 400 inoperable
buses parked at its bus pool.

"It really burdens our cash flow."

But the largest expense, he said, was the great amount of
money spent annually for fuel and spare parts.

"The drivers and conductors only have to submit the daily
rental fee to us. All the fuel and spare parts are our
responsibility."

Therefore, the company totally depends on the government, even
though the latter often neglects PPD requests for financial help,
according to Suryadi.

In the latest request, PPD asked for Rp 105.16 billion from
the ministry of transportation for the July 1999 to August 2000
period.

"The funds were allocated for PPD operations and maintenance
of Rp 35 billion, rationalization scheme of Rp 27.2 billion and
debt payments of Rp 42.96 billion," he said.

PPD had to repeatedly ask for the funds before the ministry
finally disbursed it in stages.

"Until now, not all the money has been received," he added.

PPD, he said, collected money only from the drivers' rental
fees, which could reach an average of around Rp 200 million per
day, and income from advertisements displayed on the buses.

"Thus, the recent fuel price hike did not influence the staff
earnings but it did influence the firm's cash flow," he said.

Suryadi wondered that the ignorance of the government to take
immediate action on the company's aging problem could cause other
serious situations.

"PPD badly needs new buses since we have not purchased any new
vehicles since 1997 (when the economic crisis hit the country),"
he said, adding that most of the buses currently in service were
already old and entering normal retirement age.

"Buses of five years old need much money instead of producing
it."

Last year, he said, the management wrote a letter to the
ministry asking for 550 new buses.

"There has been no response from the government so far,"
Suryadi added.

The bus company serves commuters in Jakarta and surrounding
areas and also rents some of its buses. It currently operates 142
regular buses, 148 Patas express buses, 181 air-conditioned
buses. It also rents 19 of its buses.

As reported earlier, all of the 5,500 employees went on strike
from last Friday to Monday this week, protesting the belated
disbursement of Rp 13 billion allocated for their insurance and
pension schemes. A day earlier, PPD boss Anton Sudarto resigned
over the matter.

They only called off the strike after the ministry of
transportation finally agreed to meet their request. (07/bsr)