Salary payments remain uncertain for PPD employees

Salary payments remain uncertain for PPD employees

JAKARTA (JP): Some 5,600 employees of state bus company PPD
remain uncertain of whether they will receive their salaries for
February as the company management has claimed a shortfall of Rp
2.3 billion (about US$242,105) to pay the wages.

The company's spokesman, Suryadi, told The Jakarta Post over
the weekend a government subsidy was expected to cover the
arrears, despite the government decision to stop its regular
financial aid beginning this month.

"We have urged the government to take an immediate decision,
because the salaries must reach the employees by Feb. 28,
otherwise they won't receive their wages this month," Suryadi
said.

The government last disbursed Rp 6 billion in subsidy for
December 2000 and January 2001 to the debt-ridden company,
according to Suryadi.

Government subsidy has given PPD a lifeline as the company
monthly expenditure reaches Rp 8.3 billion, while it manages only
to raise Rp 6 billion in revenue.

Suryadi said that after the government subsidy had stopped the
company had made efforts to survive, among others, by increasing
the daily rental fees starting in January and selling some of its
assets.

Currently, each driver must submit an average daily rental fee
of Rp 480,000 for regular buses and Rp 650,000 for air-
conditioned buses per day.

The company serves commuters in Jakarta and surrounding areas
with 265 regular and express buses and 189 air-conditioned buses,
servicing 67 routes across the capital. In addition, it has 486
unusable buses currently parked in its 16 bus compounds.

In order to boost cash for more revenue, the company has also
offered its assets for sale, 1.2 hectares of bus compound in
Kalideres and another 3 hectares in Jelambar, both in West
Jakarta.

"We have not succeeded in inviting investors to buy the bus
compounds and their facilities such as workshops," said Suryadi.

He said the oversized workforce and growing number of aging
vehicles have been undermining the company's financial
performance, which has resulted in huge and seemingly endless
debts.

"We have tried to gradually reduce our workforce and planned
to purchase new vehicles, but it this is insufficient to help us
to survive," said Suryadi.

The company, he added, partnered a private company, PT Sena
Wangi, in a joint operation which began in 1994, but the firm
broke its contract in 1998 due to a continuing deficit.

"Currently, we are looking for private counterparts which can
provide a management system and financial support for our
company," said Suryadi.

When asked about the possibility of the company being merged with
another state-owned bus company Damri, Suryadi said he supported
the suggestion, hoping that the merger would increase the
company's performance.

"We are glad to hear Damri president director Darius Djana
said he would take over PPD as it is," he said, adding that the
final decision would depend on the government.

Darius was a former top executive of PPD.

Suryadi hinted, however, the merger would find difficulties in
adjusting the different operational methods of the two companies.
Unlike PPD, Damri also plies intercity routes.

According to the 1999 data, Damri owns 669 buses operating in
the capital, 265 buses for intercity routes, 41 buses for
tourism, 64 buses for airport commuters and 18 buses for cargo
delivery.

Suryadi added PPD would have to increase its bus fleet to
compensate its current huge workforce, in a bid to ease the
problems which might burden the merger.

Currently, each bus is operated by at least 10 employees,
while five people are considered sufficient for the job. (07)