T

he Jakarta administration has decided to drop plans for an initial public offering (IPO) by city-owned developer PT Jakarta Propertindo'€™s (Jakpro), and plans instead to overhaul the firm'€™s management to improve its execution of the city'€™s programs.

Jakpro, a relatively inexperienced company, has been tasked with rolling out many of the administration'€™s important projects. Among others, Jakpro is responsible for developing the light rail transit (LRT) system, renovating sports halls for the 2018 Asian Games, developing water treatment plants and intermediate waste treatment facilities and installing underground ducts for utility cables.

Governor Basuki '€œAhok'€ Tjahaja Purnama said that the city administration had hired financial experts to turn Jakpro into a holding company and carry out an IPO in order to access more funding.

The city administration had planned for Jakpro to acquire smaller city-owned firms for easier management and fund distribution. However, Ahok said that the plan for an IPO had been scrapped so that Jakpro could focus on its construction projects instead.

'€œWe will focus solely on Jakpro'€™s projects'€ he said.

Ahok added that the administration had also planned to overhaul Jakpro'€™s management, and would begin searching for potential new directors this week.

'€œWe will appoint construction experts to lead Jakpro, because most of their projects are construction projects. Currently, most Jakpro directors are financial experts,'€ he said.

'€œWe may use a head hunter to search for new directors,'€ he added.

Jakpro is currently lead by Abdul Hadi as president director. Abdul was previously director of business development at state-owned toll operator PT Jasa Marga. He was appointed last January.

Ahok said that a number of Jakpro directors had already resigned, citing incompatibility with the company'€™s work routine. Jakpro business development director Agus Himawan was one of those who resigned and will now become the director of city property company
PD Pembangunan Sarana Jaya.

Ahok previously lashed out at Jakpro for its lack of progress in renovating sports halls for the 2018 Asian Games. Jakpro is tasked with renovating the Rawamangun Sports Hall, East Jakarta, and developing a modern velodrome stadium. The company must also develop an equestrian stadium at Pulo Mas Sports Hall, also in East Jakarta.

The administration earlier disbursed Rp 1.5 trillion (US$108 million) in capital to the firm so that it could commence renovations of the Asian Games venues.

Jakpro acting corporate secretary Ahmad Hidayat said that he had not heard about Ahok'€™s overhaul plans and thus refused to comment on the matter. He asserted, however, that Jakpro would continue with its projects.

'€œIt is business as usual for Jakpro. We will continue doing our job. We are a city-owned firm and we will carry out the projects that have been delegated to us by the Jakarta administration, the major shareholder in our company,'€ Hidayat said over the phone.