PPD is offered to city administration

PPD is offered to city administration

Bambang Nurbianto, The Jakarta Post, Jakarta

The city administration has been given the opportunity to
purchase state-run bus company Djakarta Transportation (PPD), but
Governor Sutiyoso said no deal could be made until all of the
company's internal problems had been resolved.

The state minister for state enterprise's assistant for
logistics and tourism, Ferdinand Nainggolan, made the offer
during a meeting with Sutiyoso at City Hall on Monday.

"We discussed many things about how to resolve our
transportation problems, including talking about PPD. In
principle, the governor has agreed to take over PPD once we have
completed a restructuring program," Ferdinand said after the
meeting.

PPD, which is jointly managed by the Office of the State
Minister for State Enterprises and the Ministry of
Transportation, is struggling under massive debts and a 1:12
ration of buses to employees.

"This means that one bus is handled by about 12 crew members,"
said Ferdinand, adding that an acceptable ratio was 1:5.

The company has been poorly managed since its founding, and
the government has never been able to bring the company up to
standard.

PPD currently has some 5,000 employees and a fleet of about
450 buses.

Ferdinand said his office was studying three restructuring
options for PPD. The first option is to lay off 3,000 employees
to bring the ration of buses to crew members down to about 1:5.
The second option is to increase its bus fleet to 1,500.

The third option, which Ferdinand said was the best, is to
temporarily lay off employees while restructuring the company.

PPD's situation has caused conflict between the company's
management and the bus crews, who are unhappy with their
salaries, which can be as little as Rp 300,000 per month.

PPD bus crews planned to go on strike on Monday to demand
raises and to protest possible layoffs.

Ferdinand estimated that to make PPD healthy, the government
would have to inject some Rp 250 billion into the company.

Governor Sutiyoso stressed that the city administration would
accept the PPD offer only if the company's internal problems were
resolved, including PPD's massive debts and its unacceptable
ratio of buses to crew members.

"It is unlikely the city administration will take over PPD
while its problems still have not been resolved, as that would
only prove to be an additional burden for us," said the head of
the city transportation agency, Rustam Effendi.