Private investors sought for city firms

JAKARTA (JP): The city administration is seeking private investors to help turn around a city-sponsored agency and seven city-owned firms, an official said on Tuesday.

Deputy Governor for financial affairs Fauzi Alvi Yasin said private investors were being sought to help manage the city-owned enterprises because they had consistently failed to contribute to the city budget.

"We are now considering cooperating with private investors to manage the firms and the agency," Fauzi said at City Hall.

He said the administration was collaborating with the University of Indonesia's Institute for the Development of Economy and Management to study the feasibility of the proposal. This joint team is expected to recommend a type of cooperation between the city and private investors, including terms of agreement.

Fauzi said the administration was accepting bids from private investors who wished to enter into the management of city parking agency BP Parkir, which is running an estimated Rp 3 billion (US$428,600) deficit for the current fiscal year.

He said several private investors had made proposals which promised major contributions to the city budget.

"But we are still studying the amount of the contribution which should be required of the private investors," he said.

PT Pusani Sukses Abadi earlier promised Rp 24 billion a year to the city budget if it was appointed to manage BP Parkir.

Fauzi said the administration also was opening bids for private investors to get involved in the management of seven unprofitable city-owned firms.

City councilors earlier questioned these firms contribution of Rp 8 billion to the city budget for the current fiscal year.

The seven firms are market operator PD Pasar Jaya, tap water firm PDAM Jaya, slaughter house PD Dharmajaya, property developer PD Sarana Jaya, Bank DKI, wastewater management firm PD PAL Jaya and hotel and tourism firm PD Wisata Niaga.

Councilor Sayogo Hendrosubroto of the Indonesian Democratic Party of Struggle (PDI Perjuangan) welcomed the administration's plan to seek private investors.

"It's illogical that some city-owned firms suffer losses or contribute very little to the city," Sayogo, who is also chairman of the City Council's Commission D for development affairs, said on Tuesday.

He said PD Pasar Jaya operated 151 markets and only was able to contribute Rp 3 billion to the city budget for the current fiscal year.

He said the firms had become "cash cows" for executives in the firms and city administration officials.

"Such mismanagement and leakages must be stopped now. (The city council) will more closely monitor the firms," he said. (jun)