W

hen it comes to troubled state enterprises, the spotlight has recently been on debt-ridden carrier PT Merpati Nusantara Airlines. However, there are over a dozen state enterprises requiring assistance to prevent them falling into bankruptcy.

As many as 17 state enterprises are indicated as financially unhealthy, with one in the process of liquidation and six being handed over to asset-management firm PT PPA, according to State Owned-Enterprises (SOE) Ministry data.

SOE expert Sunarsip said recently that prudent and quick measures were needed by the new SOEs minister to handle the troubled enterprises. '€œThere has to be firm decisions on the financially unhealthy ones, whether to be restructured or liquidated,'€ he told The Jakarta Post.

As a matter of fact only 25 companies accounted for 90 percent of SOEs'€™ total revenue, he added.

Last year alone, the total revenue of 140 state enterprises amounted to Rp 1.9 quadrillion (US$157.9 billion), with around Rp 1.02 quadrillion coming from three major state enterprises; energy firm PT Pertamina, telecommunications operator PT Telekomunikasi Indonesia (Telkom) and lender Bank Mandiri, according to the ministry'€™s data.

'€œGiven that situation, it might be better to just liquidate ailing state enterprises that operate in non-strategic sectors,'€ Sunarsip said.

Of the 17 companies that are financially unhealthy, six are in the manufacturing sector and three are in services.

PT Iglas, which manufactures glass bottles, booked Rp 70.93 billion in losses last year. The firm'€™s total liabilities stood at Rp 693.7 billion, more than double its total assets of Rp 265.7 billion.

A state enterprise which offers an air-charter service for air surveys, PT Survai Udara Penas, also recorded a disappointing performance with losses of Rp 18.9 billion last year. The company'€™s total liabilities reached Rp 73.8 billion, with total assets of only Rp 38.1 billion.

Both firms, along with airline Merpati Nusantara, garment manufacturer PT Industri Sandang Nusantara, paper producer PT Kertas Leces and consulting firm PT Energy Management Indonesia, are under the administration of PPA.

Sunarsip said that to prevent many more state enterprises from going bankrupt, the SOE Ministry had to deal with ailing state enterprises earlier. '€œSo far we have seen a number of state companies being handed over to PPA for restructuring when the enterprises were already close to bankruptcy,'€ he said.

Merpati, which ceased operations in February, for example, has mounting debts of around Rp 7.9 trillion to a number of creditors and around Rp 1.3 trillion to its employees. The carrier, meanwhile, has only Rp 2.6 trillion in total assets.

The company had been under the scrutiny of PPA since 2009, but no major progress was made.

Former SOE Minister Dahlan Iskan had said that in a bid to achieve bigger and healthier state enterprises, the ministry would speed up the establishment of holding companies and slash the number of SOEs.

Under his leadership, the SOE Ministry successfully established plantation and forestry holding companies, reducing the number of state enterprises to a total of 122.

The figure is, however, still far from the target of 91 SOEs as stipulated in the ministry'€™s strategic plan for the period 2012-2014.

Sunarsip said consolidating SOEs, including through the establishment of holding companies had to remain the priority for the new SOE minister. '€œI think it is an urgent process that the new minister has to continue,'€ he said.

Another SOE expert, Said Didu, said the ministry had to affirm that state enterprises were separate from state assets. '€œMany corrupt politicians have got their hands on state enterprises'€™ management as they consider state firms as state assets,'€ he said.

Said added that he was optimistic state enterprises could grow a lot better if they could get rid of political mismanagement.