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Govt to privatize SOEs with less than Rp50b revenue
State-Owned Enterprises (SOE) Minister Erick Thohir said many SOEs did not run their business in an optimal way.
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State-Owned Enterprises Minister Erick Thohir (facing camera, front left), Deputy Minister Kartika “Tiko” Wirjoatmodjo (center) and ministry spokesman Arya Sinulingga attend a meeting with lawmakers at the House of Representatives complex in Jakarta in December 2019. (Antara/Galih Pradipta)
T
he government plans to privatize state-owned enterprises (SOE) with revenue below Rp 50 billion (US$3.47 million) as part of its reform efforts.
SOE Minister Erick Thohir said many SOEs did not run their business in an optimal way. Such companies had become a burden and were weighing on the financial performance of SOEs that fare better.
“I have actually said this in the previous hearing, that the number of SOEs is too high, and when there are too many, it is hard to control them, and that eventually leads to small operations that are hard to consolidate,” Erick said on Thursday in a hearing with House of Representatives Commission IV, which oversees SOEs.
Since 2019, the government has doubled down on its efforts to restructure and refocus SOEs. The number of SOEs has dropped to just 41, down from 113 in 2019, recent Statistics Indonesia (BPS) data show.
SOEs’ net profit fell by 77 percent to Rp 28 trillion last year, while revenue fell 25 percent to Rp 1.2 quadrillion, as the COVID-19 pandemic led to mobility restrictions and hit household spending.
Read also: Profit at any cost?: Govt sends mixed signals on SOEs’ fates
The government would first identify state-run businesses with revenue below the threshold and then sell them to private parties, according to Erick.
