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)