"The large number of SOEs doesn't reflect business health. In fact, it can even hinder synergy between regional entrepreneurs and the private sector," Erick told a meeting with the House of Representatives on Monday, as quoted by Detik.com.

“We still need to figure out how to synchronize this open market and define the role SOEs will play,” he added, emphasizing that consolidating SOEs by sector would help improve efficiency toward achieving self-sufficiency.

The minister also provided a brief overview of the restructuring process. The country initially had 114 SOEs grouped in 24 clusters, which had been pared down to 47 companies in 12 clusters by 2024. The new plan would further reduce this figure through consolidation to just 30 SOEs in 11 clusters.

Several significant mergers are in the works toward achieving this aim, including the planned merger of the two energy giants, oil and gas holding company PT Pertamina and state electricity company PLN.

In the food sector, state-owned plantation company PT Perkebunan Nusantara, fertilizer producer PT Pupuk Indonesia and logistics firm Perum Bulog are set to merge. Meanwhile, state-owned pharmaceutical company PT Bio Farma is slated to play a central role in developing a more integrated public health system.

"We are exploring the possibility of moving merged hospitals under the Bio Farma umbrella. This will create a comprehensive healthcare system that links pharmacies, production and hospitals, ensuring that all our hospitals use domestic medicines instead of relying on imports," Erick said.

At present, Pertamina’s hospital management subsidiary PT Pertamina Bina Medika is acting as the holding company for hospitals that were formerly subsidiaries of other SOEs.

The mineral and coal sector is to be consolidated under state-owned holding company Mining Industry Indonesia (MIND ID).

Erick said the SOEs Ministry would be meeting with Public Works Minister Dody Hanggodo on Wednesday to discuss the planned consolidation in the construction and property development sector.

"One of the issues is getting approval that SOEs [in that sector] will go from seven to three construction firms so that we can carry out restructuring, rehabilitation, but also build expertise in each SOE," Erick said on Monday, as quoted by Bisnis.com.

After the consolidation, construction firms PT Adhi Karya, PT Hutama Karya and PT Pembangunan Perumahan (PP) and real estate developer Perum Perumnas would remain as the surviving entities, with PT Brantas Abipraya and PT Nindya Karya under Adhi Karya, PT Wijaya Karya under PP and PT Waskita Karya part of Hutama Karya.

In the financial sector, the four major banks Bank Mandiri, BRI, BNI and BTN are to continue operating as part of a single cluster while Indonesia Financial Group (IFG) is to manage the insurance and pension fund sectors.

State-owned holding company Defense Industry Indonesia (Defend ID) is to lead the defense sector, while PT Aviasi Pariwisata Indonesia (InJourney) is to oversee a streamlined tourism ecosystem that includes flag carrier Garuda Indonesia and Pertamina Group’s Pelita Air.

The logistics cluster comprises railway operator PT Kereta Api Indonesia, postal company Pos Indonesia and port operator PT Pelabuhan Indonesia (Pelindo), with a plan to merge shipping company PT Pelni and ferry operator PT ASDP Indonesia Ferry to strengthen maritime logistics.

PT Telkom is to head the telecommunications sector while the technology sector is consolidated under banknote printing company Perum Peruri.

Technicians prepare a Garuda Indonesia Boeing 737-800 airplane at Soekarno-Hatta International Airport on Oct. 27, 2023, for a test flight using sustainable aviation fuel.