Jakarta – The government hopes to cut the total losses of state companies this year by as much as 92 percent, thanks to strong progress in certain companies, the State Ministry for State Enterprises said over the weekend.
"Up to 28 state companies are still suffering losses, as our 2007 prognosis shows, amounting to Rp 2.94 trillion (around US$323 million)," Secretary to the State Minister for State Enterprises, Said Didu, told a group of reporters during a field trip to Subang, West Java.
"In 2008, the government plans to reduce the number of unprofitable state companies to 11, and the total losses to only Rp 0.23 trillion," he said.
According to Said, state electricity company PT Perusahaan Listrik Negara (PLN) has always been one of the main contributors to the total deficit suffered by state firms.
The 2003-2007 State Enterprises Performance Report shows PLN remained in the red throughout that period. PLN suffered losses of Rp 5.9 trillion in 2003, Rp 2.02 trillion in 2004, Rp 4.9 trillion in 2005 and Rp 1.9 trillion in 2006. For 2007, the loss has been estimated at Rp 1.5 trillion.
"Hopefully, PLN will be able to significantly decrease its losses this year. If that happens, then PLN will follow (national flag carrier) PT Garuda Indonesia, which has now been in the black since 2007," Said said.
He was apparently unaware of a statement by PLN the same day, in which the president director said the company was expecting large losses this year due to soaring production costs caused by high oil prices.
The 11 companies expected to remain in the red until the end of this year include PT Merpati Nusantara Airlines and PT Kereta Api Indonesia (KAI).
According to Said, the losses were attributable either to mismanagement or inefficiency or to the firms' commitment to the so-called public service obligation (PSO) functions.
PSO is a requirement set by the government for state firms to serve the interest of the public ahead of their corporate aims of gaining profits.
"For the companies hampered by mismanagement, the government will instill the principles of good corporate governance by reforming their leadership. For those companies that have been burdened by their PSO tasks, the government will try to increase their operational efficiencies," he said.
He cited PT Merpati Nusantara Airlines, railway company PT KAI and sea transportation company PT Pelayaran Nasional Indonesia as examples of companies carrying PSO responsibilities. (uwi)