Jasa Marga does not agree with Erick Thohir's plan. Why? (Image via Katadata)

Privatization of SOEs, Jasa Marga: Not so easy, Mr. Thohir

Indonesia's state-owned highway operator, PT Jasa Marga (Persero) Tbk, stated its opinion on the plan by the Minister of the State-Owned Enterprises (BUMN) that will privatize or let go the subsidiary companies of any BUMN that generated less than Rp50 billion income.

Speaking at a virtual discussion on Monday, the Financial Director of Jasa Marga, Donny Arsal, the Minister cannot activate his plan that easily on the toll-road operator. Donny explained that according to Indonesian Laws, Jasa Marga still requires one subsidiary company to operate one toll road.

Furthermore, he said that if the Indonesian Government wanted to reduce the number of the subsidiary of Jasa Marga, then it requires approval from the Ministry of Public Works and Housing (PUPR). If there is any change of regulation, it is more likely that one subsidiary company of Jasa Marga will operate some toll roads separately.

On the other hand, the economist of the University of Indonesia, Toto Pranoto, stated that Erick's plan to privatize the BUMNs and their subsidiaries is not a new thing. Previously, the former Ministress of SOEs, Rini Soemarno, also announced the same plan.

Privatization might be effective for financially unsound BUMNs, unnecessary BUMNs, and other considerations. Toto said that privatization is important for BUMN because it might enhance its focus to become more competitive. He said that it would be better if the Indonesian Government focuses on the BUMNs that showed achievements and good performance.

Yet, Toto stated that there are two things before implementing privatization, First, making sure that the subsidiary companies to be cut off is neutral, according to the PT Perusahaan Pengelola Aset (Persero). Second, improve BUMNs' governance by enhancing supervision and management, and communication between the Indonesian Government and the People's Representative Council (DPR).

Previously, Erick aimed to cut off BUMN's subsidiaries whose income is below Rp50 billion, such as mineral water and asphalt suppliers. In addition, the Minister also planned to cut subsidiaries of PT PLN (Persero), from 70 to 50.

Source: https://bit.ly/3rs62uV