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.