PTSI management to be reorganized

PTSI management to be reorganized

JAKARTA (JP): State Minister for the Empowerment of State
Enterprises Tanri Abeng said state-owned PT Surveyor Indonesia
(PTSI) would soon hold a shareholders meeting to appoint a
finance director, a position which is now held concurrently by
president Toga M. Sitompul.

"We are now evaluating several candidates for that position,"
Tanri told reporters in reply to questions as to why the two
important managerial positions were held by the same person.

Some analysts and legislators had recently criticized PTSI for
what they alleged to be corruption and financial mismanagement
due to the double function of its chief director.

La Ode Kamaluddin, a member of the House of Representatives
Commission VIII for finance, budget and state companies, for
example, had questioned the effectiveness of the supervision
within PTSI because its chief commissioner, Soedarjono, is also
chairman of the Development and Finance Comptroller Agency
(BPKP).

BPKP annually audits PTSI's financial reports.

However, Tanri saw this only as an emergency situation which
would duly be corrected.

"Until now, I don't see any reason to suspect a conflict of
interest. Moreover, we need Soedarjono's professional experiences
until a qualified successor is available," added Tanri.

He said that he had yet to consult the coordinating minister
for development supervision, Hartarto, about the matter.

PTSI, which is 76 percent owned by the government, 20 percent
owned by Swiss Societe Generale de Surveillance (SGS) and 4
percent owned by PT Sucofindo, another state-owned surveyor
company, was set up in July 1991 to take over the preshipment
inspection of Indonesian imports from SGS.

However, the contract was terminated in April 1997 as the
government restored customs inspections of imports at the ports
of unloading.

PTSI came under a barrage of criticism recently for alleged
corruption and mismanagement due to ineffective supervision and
its failure to develop new businesses.

Even now, according to critics, the company has survived only
because of another government contract, awarded in August 1997,
to verify imported equipment for the oil and gas industry.

Toga recently claimed to have gained a technical inspection
contract from Vietnam, but the Vietnamese commercial attache in
Jakarta denied the existence of such a deal.

The BPKP audit of PTSI's financial reports for 1997 found a
loss of Rp 2.42 billion incurred by its investments in mutual
funds which have nothing to do with its core business.

Moreover, provisional estimates of PT Surveyor Indonesia
revenues for 1998 have further heightened analysts' and
legislators' assumptions that the state-owned company would be
bankrupt without the government contracts.

Latest estimates show that almost 95 percent of PTSI's
revenues for 1998 were generated by its contract to verify
imported equipment for the oil and gas industry, while only 5
percent of its revenues were generated by new businesses
developed since last year.

The revenue-generating ratio was in sharp contrast to its 1998
Working Plan which projected 60 percent of its total revenues
would be from new businesses.

PTSI even acknowledged in the 1999 Working and Budget Plan
it submitted to Tanri's office that almost Rp 48 billion, or 45
percent, of its Rp 98 billion in 1998 revenues from its
government contract would be a windfall gain from the rupiah's
sharp depreciation.

Some analysts and legislators have therefore suggested that
because PTSI and PT Sucofindo operate in the same areas of
business, they be merged for efficiency.

In fact, one of the measures stipulated in the Master Plan on
the Reform of State-owned Enterprises, issued by Minister Tanri
last week, is the planned merger of PTSI and PT Sucofindo.

Tanri said the merger process is still being studied.

"We want to ensure that the groundwork for the merger is
solid," Tanri added. (rei/vin)