T

he contribution of state-owned enterprises in the form of dividends to the state budget will increase
Rp 3 trillion (US$203.87 million), from Rp 31 trillion in the 2015 state budget to Rp 34 trillion next year.

The increase was agreed to during a hearing between State-Owned Enterprises (SOE) Minister Rini Soemarno and House of Representatives Commission VI overseeing state companies'€™ affairs.

'€œWe are ready to increase the amount of dividends in the 2016 state budget to Rp 34 trillion,'€ Rini said on Thursday.

Previously, the minister set the dividend contribution at Rp 31 trillion consisting of Rp 6.9 trillion from state lenders and Rp 24.22 trillion from non-banking state companies.

Rini further said the additional Rp 3 trillion in 2016 was expected to come from around 17 publicly listed state-run companies, such as telecommunications firm PT Telkom.

According to data from the ministry, oil and gas company Pertamina will be the largest dividend contributor to the 2016 state budget with Rp 4.80 trillion, followed by state electricity company PLN with Rp 1.89 trillion, state insurer PT Jasa Raharja with Rp 1.10 trillion, fertilizer producer PT Pupuk Indonesia with Rp 954 billion, agriculture company PTPN III with Rp 500 billion and seaport operator PT Pelindo II with Rp 416 billion.

Rini said her ministry had lowered the profit target of state companies in 2015 from Rp 165.4 trillion to Rp 141.5 trillion.

Because the ministry failed to meet the profit target, it needs to increase the dividend contribution for next year'€™s state budget.

'€œWe feel that we are able to increase the dividend contribution for next year in order for us to achieve a higher profitability,'€ Rini added.

Aside from discussing the contribution of state-owned companies'€™ dividends, the hearing also approved an additional Rp 31.32 trillion state capital injection (PMN) for 22 state companies to be included in the 2016 state budget. Commission VI will discuss the proposal further and expects an agreement to be made on Monday.

Meanwhile, commission member Azam Aswan of the Democratic Party suggested that non-cash injections should first be audited by the Supreme Audit Agency (BPK).

'€œFurther decisions on the 2016 injections will be discussed at the House'€™s budgetary committee [Banggar]. They will have to look at the country'€™s financial conditions first before they make a decision,'€ Azam said.

Rini added that some companies would need an increase in their injections for 2016.

An example of an SOE that will receive a higher state capital injection is PLN, which is poised to receive up to Rp 10 trillion from its previous figure of Rp 5 trillion.

Rini said that PLN'€™s increase was necessary in order for it to increase its network and quality of electricity transmission.

Other companies that will receive an additional amount in the 2016 injection proposal are the State Logistics Agency (Bulog) and PT Perusahaan Perdagangan Indonesia (PPI).

Meanwhile, the Rp 64.82 trillion in state capital injections that were approved in February this year using the 2015 state budget are still being disbursed to 40 intended SOEs, with four firms expected to receive their share by the end of October.

'€œInjections for four SOEs, including Bulog, PPA, Antam and PT PAL, are currently in the process of disbursement, hopefully to be finished by October. About Rp 17 trillion has already been liquidated to several companies including [construction companies] Hutama Karya, Adhi Karya, Waskita Karya,'€ she said.

The remaining funds are currently being processed by the Finance Ministry and have been agreed by the Law and Human Rights Ministry, with Rini hoping that all funds would be disbursed by the end of 2015.