PPD needs dissolution: A new firm welcome

PPD needs dissolution: A new firm welcome

Soeryo Winoto, The Jakarta Post/Jakarta

Public transportation in Jakarta remains a perennial headache.
The recent strikes by thousands of drivers and employees of the
state-owned transportation company Perusahaan Pengangkutan
Djakarta (PPD), leaving thousands of people with no means to get
around town, merely compounded the headaches.

Thousands of drivers parked their buses on the street,
marching to the State Palace compound, demanding that their
salaries be paid. They parked the buses on nearby streets,
causing serious congestion, ignoring passengers who seemed
unaware that their basic rights for transportation had just been
denied.

Reports of PPD drivers and crew members taking to the streets
demanding their rights have become commonplace, and yet the
public and relevant government institutions, unfortunately, have
taken no serious action to address the problem.

In one street demonstration in 2003, PPD drivers demanded an
increase in their salary, which was an average of Rp 300,000, and
suggested that the debt-ridden company be dissolved due to the
management's failure to cleanse the company of its corrupt
officials.

Responding to reports that the government planned to inject
Rp 250 billion to cure the company's cancer, the drivers said
that such an injection of fresh funds would be useless and that
they feared the money would go straight to managers' pockets
without any clear accounting of it.

It was obvious that the employees' trust in their own managers
has been in peril for several years. Nonetheless, both the
transportation and state enterprise ministries, which jointly
manage PPD, have yet to concretely or positively respond to the
situation.

The government has not yet asked the public to discuss the
ways to help PPD out of its managerial and financial
predicaments.

If corruption has been rife in the company, which was supposed
to provide Jakarta residents with cheap transportation, for
years, then why are the anti-corruption agencies and groups not
doing anything?

With not a single official, public explanation as to what has
really happened to the company, the government has simply let the
problems go unresolved, making it possible for further unrest
among the drivers and employees to erupt again. And, thus, the
drivers' strikes earlier this week may well have been predicted.

To fix PPD, the government seems to have two options: Handing
over PPD to the Jakarta administration, or inviting private
investors to take it over.

Offering the Jakarta administration an option to manage the
mismanaged PPD was first made two years ago following the
drivers' protests. Governor Sutiyoso hinted at that time that it
was not possible that the Jakarta administration could take over
the "chaotic" company, without the company resolving all its
problems first. The Jakarta administration's stance has not
changed.

The city will obviously agree to "accept" PPD once the company
is freed from its financial burdens. And this is very
understandable.

However, many may express skepticism about the
administration's sincerity in accepting PPD after the company has
no debts. Does the administration really want to improve
transportation by improving PPD, or is it just is interested in
PPD's abundance of assets, valued at more than Rp 360 billion?

Given that the city administration's track record in managing
its own companies is far from impressive, it is doubtful that PPD
would be better managed by the Jakarta administration. The fact
that many of Jakarta's assets have been sold to private firms
also indicates the administration's inability to manage what
should be profit-oriented companies.

Then what about the second choice? Private investors,
naturally, would be extra careful before putting money into such
a poorly managed company, where corruption has become rife. Most
would probably see investing in PPD like pouring a pail of water
onto a desert.

Dealing with PPD's problems will be complicated and very
costly. The government has no other option but to bear all the
consequences. Cleansing the company of all its corrupt and
unscrupulous staffers appears to be impossible, however,
dissolving the company and dismissing all the employees would be
the best choice. A new company should be set up to replace (old)
PPD to make it possible for the investors to own a company with a
new, fresh and healthy atmosphere. The 5,000 laid off employees
of (old) PPD would given the opportunity to enter the new company
(new PPD - or whatever its name) on the condition that they
passed serious screening process.

Political will must exist to make all this happen. Only under
new management will a new PPD be able to serve the public with
better transportation and, expectedly, reap profits at the same
time.