SOEs SHOULD MERGE TO REDUCE DOMINATION IN BUSINESS SECTORS

by Andi Abdussalam

Jakarta, Oct 11 (Antara) - Some 800 subsidiaries of 118 state-owned enterprises (SOEs) need to merge to reduce their domination in business sectors, so that small-scale private firms will have greater access to government projects.         This issue was raised by Rosan P. Roeslani, general chairman of the Indonesian Chamber of Commerce and Industry (Kadin), at its national meeting last week. In his speech, Roeslani highlighted the dominant roles played by SOEs in government projects due to which national private firms had lack of ample opportunities to secure projects.         "We hope the opportunity would first be given to national firms if they are unable to implement the projects and only then should they be offered to SOEs," Roeslani remarked during the meeting attended by President Joko Widodo (Jokowi).         There are several projects handled by SOEs and their subsidiaries, including small projects offered to their subcontractors, which should have, in fact, been offered to private firms and small companies.         Kadin expressed hope that SOEs would implement projects that can become their core areas of business and would not seize portions that should be carried out by the nation's private and small-scale companies.         "We hope that SOEs would return to conducting business in their core areas," Roeslani stressed.

STATE CAPITAL PARTICIPATION STILL NEEDS FURTHER DELIBERATION

By Andi Abdussalam

Jakarta, Jan 29 (Antara) - The State Capital Participation (PMN) worth Rp48.01 trillion, which the government plans to inject into state-owned enterprises (SOEs), still needs to be further deliberated and contemplated.         "We still need time to get a comprehensive picture on the various aspects related to the PMN. We also need to deliberate it further with the finance minister and the SOE minister before endorsing its inclusion in the 2015 revised state budget,"  Fadel Muhammad, the chairman of Commission XI on financial affairs of the House of Representatives (DPR), stated after attending a hearing with the finance and SOE ministers on Wednesday night.         Earlier, the State Audit Board (BPK) had urged the House and the government to give special attention to the 35 SOEs that would receive PMN injection.         The BPK emphasized that the management of state finance by SOEs should be done in accordance with the existing regulations, especially in abiding to the regulations on financial transactions and allocations for business expansion.

SILENT OPERATION NEEDED TO FIGHT GRAFT IN STATE FIRMS

By Andi Abdussalam

Jakarta, Dec 11 (ANTARA) - Although Indonesia has recorded a slight improvement in its fight against corruption, as indicated in the Corruption Perception Index (CPI), yet the problem remains rampant across the country and needs serious attention.   Last year, Indonesia scored 3.0 in the Transparency International's CPI, up 0.2 points from its CPI score of 2.8 in 2010. In 2011, Indonesia ranked 100 out of 183 countries in the world. However, it ranked 110 out of 178 countries in 2010, and 111th out of 180 countries in 2009.          Despite the improvement, Indonesia faces a serious problem that must be fought off. President Susilo Bambang Yudhoyono himself admitted that corruption continued to undermine the country.  "Corruption is rampant in this country. It is a serious problem, and it hinders the country's development," he said during the commemoration of the International Anti-Corruption Day at his state palace on Monday.

STATE FIRMS EXPECTED TO PERFORM BETTER IN 2012

by Andi Abdussalam

Jakarta, Dec 17 (ANTARA) - State-owned Enterprises (SOEs) are expected to get new boost as the state-owned enterprise ministry will carry out restructuring on their managements next year so that none of them will experience negative growth again.          As part of its efforts to develop the country's state companies, the ministry will conduct an overall evaluation on their boards of directors and commissioners, particularly those so far deemed to have bad performance.          "We will evaluate the board of directors of each SOE and find a solution to improve their performance," Dahlan Iskan,  minister of state enterprises, said at the SOE ministry here on Friday.          Dahlan, who was recently named SOE minister replacing ailing Mustafa Abubakar, said that in the framework of its right sizing program for state firms, his ministry would reduce the number of 17 state companies which up to now were still losing business.          "We will do our best so that next year there would be no longer state firms which experienced negative growth," Dahlan, a media professional, who has successfully developed the Jawa Pos media network, said.         He said that he needed to know why a state firm could not develop and in this case its board of directors and commissioners should be comprehensively evaluated.         The SOE minister said that if a state firm was later known to have faced difficulties in gaining progress because its management was unable to work and had no capability to manage the company, then its management would soon be revamped.          As one of the national economic pillars along with the private sector and cooperatives, state enterprises should play a bigger role in national economic activities. After all, Indonesia has recently been rated as an investment grade country.          "State firms should be able to make use of the increased rating to an investment grade nation in order to help boost national economic growth," Dahlan said.          International rating agency Fitch raised Indonesia's debt rating from "BB" to "BBB-" on Thursday categorizing the country as investment grade which is good for long-term investment.          State firms should not be lagged behind and ignore the opportunities. They have to do all of their business plans immediately, including their divestment plans.          There are three state companies which failed to go public this year and are expected to carry out the initial public offering (IPO) in 2012.  Besides, three others are planning to go public in the same year next year.          "Next year (2012) there must be minimally three companies that will go public," he said at his office. He said it was not impossible that subsidiaries of state-owned companies would also do it in addition to the three companies.          Dahlan said that in principle his office would encourage state-owned companies to go public as a way of creating transparency and accountability and improving the companies' financial performance. He also encouraged them to issue bonds.  "In principle I will only follow. Whoever is ready go ahead," he said.          The chairman of the Association of Indonesian Issuers (AEI), Erlangga Hartarto, said earlier that the state enterprises ministry had to make an implementation policy for the state-owned companies' IPO to assure it would go smoothly and not hurt the companies concerned.          Dahlan declined to tell the names of the three companies that would conduct an initial public offering next year but he hinted that one of them is a cement producer. He said state-owned companies' subsidiaries that are ready and potential to go public would be given a priority.          The state-owned companies would use the financial statement of the end of December 2011 for the IPO and therefore it would only be realized by the end of the first semester at the soonest.          The state enterprises ministry earlier recorded that three companies have been ready to go public namely PT Semen Baturaja, PT Waskita Karya and  state-owned plantation firm PTPN III while the subsidiaries that have been ready are PT Krakatau Wajatama and PT Pertamina Hulu Energi.          In the meantime, the state-owned enterprise ministry also assured that the three SOE early expected to go public in 2011 would delay their plan to 2012 because they had not yet gained approvals from the House of Representatives (DPR).          The three companies are textile manufacturer PT Primissima, papermaker PT Kertas Padalarang and asphalt producer PT Sarana Karya.          Former minister of sate-owned enterprises Mustafa Abubakar said last August that the government had planned to divest its shares in the three state-owned firms by end of 2011.          "We hope that the divestment of shares in the three state enterprises can be completed this year," Mustafa said last August.          The minister added that the government wanted to divest its shares in Primissima to private investors, but expected other state enterprises to acquire Kertas Padalarang and Sarana Karya. The government currently owns a 52.79 percent stake in Primissima, a 48.4 percent stake in Kertas Padalarang and 100 percent of Sarana Karya.          However, the SOE ministry has assured that the plans of the three state firms to go public this year could not be implemented because the DPR had not yet approved it.          "The privatization programs of Primissima, Kertas Padalarang, and Sarana Karya cannot be done this year  (2011) and possibly will be carried out next year (2012)," Deputy Minister for State-owned Enterprises Mahmuddin Yasin told a hearing with Commission VI on trade and investment, this week.          Besides on the privatization program, state-owned enterprises are also expected to take part in the government's  Masterplan on Acceleration and Expansion of Indonesia?s Economic Development (MP3EI).          Nine SOEs on the infrastructure sector with a combined capital expenditure of Rp46.522 trillion will take part in the projects. "Those projects are scattered in all of Indonesia's economic corridors (except toll roads in Java and Bali)," Dahlan told a hearing with the House of Representatives Monday night. The MP3EI projects to be implemented by the state-owned companies included airports , seaports , ferry fleet capacity expansion, railways and toll roads.          "Altogether, the capital expenditures and operational expenditures for the MP3EI projects in 2012 will total Rp49.61 trillion," the minister said.          For this year, the state-owned enterprises ministry had allocated a total of Rp192.01 trillion for infrastructure projects while its entire budget for  MP3EI projects for the period 2011-2014 was set at Rp836 trillion.***5***   (T.SYS/A/A014/F001) 17-12-2011 13:59:0

STATE FIRMS TO PUSH UP CAPEX TO RP380 TRILLION

By Andi Abdussalam

Jakarta, Feb 17 (ANTARA) - State-owned enterprises (SOEs), as one of the country's economic pillars besides private companies and cooperatives, are playing an increasingly  significant role in national economic development through their upward performance and  financial contributions to the state.          The increasing role of state-owned companies is reflected in their  performance which has been improving steadily, as well in  their financial contributions to the state which in 2010 stood at Rp132.6 trillion (in the form of dividends, taxes and privatization).          Besides, state-owned firms in 2010 also made  indirect contributions to national development in the form of capital expenditure worth Rp197 trillion and operational expenditure valued at Rp932 trillion.          Therefore, to increase their contribution to national development, their capital expenditure would be further pushed up. The government through the Ministry of State Enterprises (BUMN) is ready  to push state firm to increase their capital expenditure to the level of Rp380 trillion in the next four years.          Coordinating Minister for Economic Affairs Hatta Rajasa said the BUMNs' capital expenditure in 2011 would reach Rp380 trillion which would go to business expansion to meet the needs for an economic corridor development program.          However state companies that are just conducting restructuring certainly would not be forced to increase their capital expenditure but those that have been healthy and have the potential to rise would be encouraged.          Hatta Rajasa said he was optimistic there would be a leap in the growth of capital expenditure of the BUMNs in line with their increasing financial performance. "The potential to raise capital expenditure may be gained from  reduction of operational costs," he said.          According to State Enterprise Minister Mustafa Abubakar, right now the operational expenditure of all SOEs is bigger than their capital expenditure. "The National Economic Committee thinks if the SOEs could increase their capital expenditure more new jobs would be created," Mustafa said.          In view of that he said he would conduct kind of elaboration on the budget and capital capacity of each SOE to invest. "The deputies are still recording the SOEs that are potential to increase their capital expenditure," he said.          Mustafa Abubakar said that Rp380 trillion was the consolidated amount and it was hoped it would  come from 60 to 70 percent of SOEs that are in good financial conditions.          He said in the 2011 corporate working budget plan (RKAP) the capital expenditure of all BUMNs was expected to reach Rp210 trillion, up from Rp196.91 trillion last year.          Meanwhile, their operational expenditure was expected to reach Rp1,929.87 trillion, up from Rp932.15 trillion last year.          According to the minister the performance of state-owned firms has continued to increase as evident in the increase in their contribution to the state.          "In general the performance of state-owned enterprises is encouraging. This is regardless of the fact that improvements still have to be made, yet state enterprises are able to serve as the motor of national economic development," the minister said in a recent reflection on state firms during a coffee morning of SOE Executive Club here recently.           Mustafa told about 50 SOE directors and commissioners that the contribution of state firms to the state comprised of dividends worth Rp29.9 trillion, taxes Rp100.6 trillion and proceeds of privatization worth Rp2.1 trillion.          In the meantime, the state companies? contribution to the economy as a whole can include the market capitalization of 17 state firms in December 2010 which reached Rp819 trillion, or accounting for 26 percent of the whole capitalization in the Indonesian stock exchange.          SOEs also provided indirect contribution to the national development in the form of capital expenditure of 142 state firms worth Rp197 trillion , operational expenditure Rp932 trillion, partnership and environment development scheme Rp2.7 trillion, smallholder?s credit scheme (KUR) distribution Rp16.4 trillion and public service obligation (PSO)201.3 trillion.          "This contribution will still increase because not all  of the SOEs, particularly those listed in the capital market, have published their financial reports," the minister said.           In 2010, state-owned firms? total assets were projected to reach Rp2,382 trillion, which significantly increased from Rp2,234 trillion in 2009.          At the same time, their net profits were estimated at Rp100 trillion which increased from Rp88.05 trillion in 2009.          "After taking into account the performance of all publicly listed state-owned firms in the fourth quarter of 2010, the total of their income would reach Rp1,037 trillion, increasing from Rp987.37 trillion in 2009," he said.          As part of the efforts to increase their performance state-owned companies are also encouraged to go public. Chief Economic Minister Hata Rajasa said the government would not restrain state-owned companies from going public.          "There will be no limitations for SOEs to conduct IPO," he said here on Monday.           He said the government would encourage SOEs to go public because it would give a positive impact not only to the companies.           "SOEs that go public will be encouraged to be healthy because they will be scrutinized by the public and their financial reports will be audited," he said.      (T.A014/A/HAJM/21:40/A014) 17-02-2011 22:11: