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Govt looks to cut down infrastructure SOEs to just four firms
Smaller firms are to be controlled by the National Asset Management Company (PPA) and state-owned holding company Danareksa, while the process for bigger companies is still being studied.
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State-Owned Enterprises (SOEs) Minister Erick Thohir is greeted by residents before touring the Bung Karno Exile House in Bengkulu, on Jan. 24. (Courtesy of ET Team)
T
he State-Owned Enterprises (SOEs) Ministry is in the process of consolidating the infrastructure sector to reduce their number from nine to four.
The plan was in line with a recommendation made by the Boston Consulting Group two years ago to keep a small number of firms with specialized segmentation, SOEs Minister Erick Thohir said on Wednesday, as quoted by Kontan.
Smaller infrastructure firms would be merged into the National Asset Management Company (PPA) and state-owned holding company Danareksa. Meanwhile, the process for bigger SOEs, such as Waskita Karya, PP, Wijaya Karya, Adhi Karya and Hutama Karya, is still being studied.
"We will try to consolidate Hutama Karya and Waskita, as well as PP and Wijaya Karya. It would be similar to Bank Mandiri, which has Bank Syariah Indonesia (BSI) [as its subsidiary], while the merger [between state-owned sharia banks] happened in the subsidiary. But no decision has been made," Erick said.
Furthermore, Erick explained that the ministry still needed to analyze the cash flow of those big companies to ensure the process would not disrupt ongoing projects and hence their business performance.
Last month, the SOEs Ministry announced its plan to request an additional Rp 25 trillion from state coffers this year to aid state-run construction firms, many of which are burdened by debt.
Deputy SOEs Minister Kartika Wirjoatmodjo said the ministry was in the process of requesting the allocation in the 2023 state budget. He said the ministry was expecting a total of Rp 80 trillion in SOE dividends for the state from 2022, exceeding the Rp 50 trillion target, and that the capital injections could come from the difference.
