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Jakarta Post

House wants audit on SOEs receiving state capital

  • Prima Wirayani

    The Jakarta Post

Jakarta   /   Fri, September 8, 2017   /   03:39 pm
House wants audit on SOEs receiving state capital President Joko "Jokowi" Widodo delivers his state of the nation address before members of the House of Representatives on Aug. 16. (JP/Wendra Ajistyatama)

The House of Representatives’ Commission XI, which oversees financial affairs, has asked the Supreme Audit Agency (BPK) to launch a special-purpose audit into state-owned enterprises (SOEs) suffering from losses after receiving state capital injections (PMN).

The move was decided in a working meeting between the lawmakers and Finance Minister Sri Mulyani Indrawati to discuss the effectiveness of PMN funds.

The government often finds itself in hot water over the PMN issue, due to the unsatisfactory financial performance of the SOEs.

Read also: 24 state-owned enterprises record losses in H1

"Commission XI asks the government to carry out a stricter selection and prudent measures in granting the PMN, so that there are no more PMN-receiving SOEs suffering losses," the commission’s chairman, Melchias Marcus Mekeng, read out the meeting conclusion on Thursday.

"Commission XI asks the government to supervise and evaluate the SOEs with profitability and leverage below the industry’s average."

The government has allocated Rp 48 trillion (US$3.6 billion) for capital injections for 17 SOEs last year. In 2015, it disbursed PMN funds amounting to Rp 64.8 trillion to 34 SOEs.

Its data show that almost all PMN-receiving SOEs, such as those busy in infrastructure, real estate and energy, are underperforming in terms of profitability and leverage.

State firms in the financial sector, transportation and tourism, meanwhile, are performing better than their private-sector rivals.

"We have asked the SOE Ministry to carry out the audit," Sri Mulyani told the lawmakers. (bbn)