State companies asked to clean up their acts
State companies asked to clean up their acts
JAKARTA (JP): The government ordered all companies run by provincial administrations yesterday to stop using public service as an excuse for poor efficiency.
The companies should continue to serve the public without sacrificing financial efficiency, Suryatna Soebrata, the Secretary General at the Ministry of Home Affairs, told a meeting of executives and commissioners from 67 companies owned by 27 provincial administrations.
The gathering also discussed education and training for the executives and commissioners and ways to improve professionalism.
Suryatna said these companies are expected to help provincial governments raise revenues and support the current government's drive to bolster regional autonomy.
The government plans to launch a new drive to push for greater regional autonomy later this month, granting the local administrations greater say, and responsibility, in managing their own affairs.
He cited a recent study by the International Monetary Fund which suggested that locally generated revenues are slight and that most provincial administrations still rely on hand outs from the central government.
Suryatna also warned that some of these state companies which might have enjoyed some monopolistic power once should now be prepared to face competition from alternative private companies.
He pointed out that the various Perusahaan Air Minum (PAM), the clean water supplier companies administered by provincial administrations now have to compete with producers of bottled water.
Most PAMs, including the one in Jakarta, are notorious for huge financial losses.
Provincial administrations are allowed to run companies with the chief intention of providing public services.
The Jakarta administration for example runs a bank, a slaughtering company, a clean water company, a company which manages markets, another managing small hotels and another in building low cost housing.
Suryatna said state companies under provincial administrations have dual functions: one is social and the other is economic.
"These are not necessarily two opposite functions. The state companies must be able to fulfill their social functions and strive to be profitable at the same time," he said. "This can be done if the companies are professionally managed."
He also suggested merger between the companies within the same province as one way of enhancing the capability and efficiency of their management.
"You cannot forever rely on subsidy or assistance from the central government in managing the development, the administration and the people in your regions," he said. (29)