T

he next government, which will assume office in October, is being urged to make a breakthrough to speed up the consolidation of the country'€™s state-owned enterprises (SOEs), which has been hanging in the balance for more than 15 years.

Tanri Abeng, former Indonesian SOE minister for the period of 1998 to 1999, said on Tuesday that he had developed a road map during his one-year term to modernize SOEs, which was to consolidate state companies into 10 sectoral holding companies under one super holding firm by 2010.

During his tenure, Tanri successfully merged four ailing state-owned banks '€” Bank Bumi Daya (BBD), Bank Dagang Negara (BDN), Bank Expor Impor (Exim) and Bank Pembangunan Indonesia (Bapindo) '€” into Bank Mandiri, which is currently the country'€™s largest bank by assets, with a total wealth of Rp 764.94 trillion (US$65.4 billion) as of June.

Tanri had also prepared to establish an energy holding, which was set to be a consolidation of state-owned oil and gas firm PT Pertamina, electricity firm PT Perusahaan Listrik Negara (PLN), gas distributor PT Perusahaan Gas Negara (PGN) and coal miner PT Bukit Asam.

'€œThe plan, however, was not yet realized before the end of my tenure in 1999, with the next administration, up until the current administration, doing nothing about it or coming back to the SOE consolidation road map,'€ he said.

The consolidation was crucial to making Indonesia'€™s SOEs bigger and stronger in a bid to expand business globally and to prepare for tougher competition ahead of the free trade area, he said.

'€œTo achieve that, it is very much in the hands of the next government to turn back the clock and speed up the consolidation process,'€ he said.

Under the current SOE Minister Dahlan Iskan, the SOE Ministry has begun to realize the grand road map, but there have only been minor achievements.

Early on in his tenure, Dahlan tried to consult with the government through the Finance Minister and the President, but he has only recently received a clear response, saying that a permit for plantation and forestry holdings would be issued in September.

The country currently has 139 SOEs, according to the SOE ministry'€™s website, and expects to slash the number to around 11 holding companies by 2020 under the ministry'€™s current road map.

In response to the slow progress on the consolidation of SOEs, former SOE Ministry secretary Muhammad Said Didu said recently that the current regulations provided too much power to the Finance Minister in giving the final say on critical decisions related to SOE privatization, mergers, acquisition and liquidation, while the SOE Minister remained powerless.

State-owned lender Bank Negara Indonesia (BNI) president director Gatot M. Suwondo said on Tuesday that he expected the next government to harmonize regulations for state-owned banks.

State-owned lenders in the country have to comply with eight laws, including the SOE Law, the Corporate Law and the Finance Law, all of which have different points of view, he said.

'€œThe Corporate Law states that companies'€™ assets belong to the companies, while the SOE Law does not clearly define whether SOEs are included as state assets or separated assets,'€ he said.

State-owned lender Bank Mandiri president director Budi Gunadi Sadikin, meanwhile, said that his firm expected the next administration to provide regulations to strengthen the domestic banking industry while protecting its interests during its expansion overseas.