State-Owned Enterprises Regulatory Agency to Soon Cut 1,000 SOEs to Around 300

Jakarta (ANTARA) - The Head of the State-Owned Enterprises Regulatory Agency (BP BUMN), Dony Oskaria, has reaffirmed the government’s commitment to a comprehensive transformation and restructuring by slashing 1,077 companies to approximately 200-300 companies.

“We are conducting an in-depth assessment through four stages, from global benchmarking and market potential to internal capabilities,” Dony stated in an official release received in Jakarta on Thursday.

This step is being taken alongside the formation of the Sovereign Wealth Fund Danantara, which will consolidate state assets to make them more focused and globally competitive.

Dony explained that there are currently around 1,077 companies in the SOE ecosystem that are being fundamentally reviewed to be streamlined to about 200-300 companies this year.

From the assessment results, BP BUMN has divided the companies into four main quadrants. The first is liquidation for companies whose debt burden far exceeds assets and lack market competitiveness.

Then, divestment for small-scale companies outside the core business, for example, travel agencies owned by energy SOEs.

Another crucial step is the merger or consolidation of companies based on industrial sectors, such as logistics, hospitals, and hospitality, to achieve large economies of scale.

Furthermore, development for strategic SOEs that form the backbone of the economy and defence.

In addition to streamlining, Dony also emphasised a fundamental paradigm shift in interactions between SOEs. The term “SOE Synergy” is now firmly replaced with obligation.

“Now the owner is Danantara. It’s no longer synergy, but it’s ‘mandatory’ to use SOE companies. All needs within the SOE environment that intersect with companies like in Defend.id are mandatory,” he said.

Dony gave an example in the defence industry, such as PT PAL, PT Pindad, PT Dirgantara Indonesia, and PT LEN Industri, which can no longer struggle alone without synergies from other SOEs.

“Our defence industry must become a flagship. It’s impossible for an industry to grow and conduct technology transfer if we don’t have bias towards it. I mandate all SOEs, such as Pelni, ASDP, and Pertamina International Shipping (PIS), to build their ships at PT PAL,” Dony stated.