SI and Sucofindo urged to merge 'for efficiency'

JAKARTA (JP): A legislator is recommending the government merge the two state-owned surveyors to improve business efficiency and eliminate their competing interests.

La Ode Kamaluddin of the House of Representatives' Commission VIII for the State Budget and finance contended on Friday it was too costly to have PT Surveyor Indonesia (SI) and PT Superintending Company of Indonesia (Sucofindo) operating in the same field.

"The two companies should be restructured so they could be under one roof. Therefore, they would not have to compete against each other in the same field," La Ode of the ruling Golkar faction told a media briefing here.

They should merge, or the strongest of the two should be allowed to take over the other, he said.

"If Surveyor Indonesia has a better or stronger capacity than Sucofindo, then it should acquire the Sucofindo or vice versa."

Sucofindo, which is 95 percent owned by the government and 5 percent by the Geneva-based Societe Generale de Surveillance (SGS), conducts preshipment inspections of the country's exports.

The company also operates as a quality management evaluator.

SI is 4 percent owned by Sucofindo, 20 percent by SGS and the remaining 76 percent by the government. In 1985, it was assigned to conduct preshipment inspections of imports at overseas ports. Last year, SI's contract with the government expired, and the preshipment system of imports was replaced by a postaudit system which was implemented by the Ministry of Finance's Directorate General of Customs and Excise.

Since then, SI has been a competitor of Sucofindo, assessing quality management assurances in the country, awarding the ISO 9000 and ISO 14000 certifications.

It also entered other inspection businesses, including the Moslem halal certification of food, assessing the value and prices of aircraft, ships and other high-tech products.

During Friday's briefing, La Ode blasted Surveyor Indonesia for its lack of efficiency and poor financial management.

La Ode characterized SI's profit as the result of a "windfall" gain rather than the company's efficient management and professionalism.

"After SI's contracts (of the preshipment inspection) ended in March 1997, it was saved by another contract which was shifted by the government from Sucofindo previously."

He alleged the company engaged in reckless expenditures, for example in the purchase of some of its assets, and some top executives committed graft practices. (das)