State Own Enterprises (SOEs) minister, Erick Thohir, wants to lessen number of state companies not more than 42 in 10 years, through the consolidation and downsizing the subsidiaries and other units - Photo by TheInsiderStories

JAKARTA (TheInsiderStories) – State Own Enterprises (SOEs) minister, Erick Thohir, wants to lessen number of state companies not more than 42 in 10 years, through the consolidation and downsizing the subsidiaries and other units. Currently, the ministry managed 142 SOEs with 800 subsidiaries separating in 27 clusters.

“In several years we will try to slices the number of SOEs under 14 cluster, so each vice minister only manages seven to eight clusters,” he told media through a vide conference today (04/03).

At the presser, three SOEs reported their readiness to streamline the companies number. CEO of PT Telkom Indonesia Tbk (IDX: TLKM) CEO, Ririek Adriansjah said, the largest telco operator, plans to reduces 20 companies in two years time. Currently, the Group owns 49 subsidiaries and units.

“We will reduce the units through liquidation and divestment. Going forward Telkom will evolve into a digital company,” he explained.

While, CEO of flight carrier, PT Garuda Indonesia Tbk (IDX: GIAA) Irfan Setijaputra, has plans to rationalization six units in several years. As an example, PT Garuda TahuBeres Indonesia will consolidating with its cargo company.

Then, CEO of PT Pertamina, Nicke Widyawati revealed, targeting to liquidate and divested 25 subsidiaries and unit without any lay off. She adds, “This year seven were liquidated and one to divest. The rest next year.”

In January, Thohir has stated, to implement the plans, his ministry prepared five blueprints to balance the economic and social values ​​can be well exposed. Later on, he continued, there will be a mapping. which is heavy in cooperation, companies with large assets but large public services such as PT Bank Rakyat Indonesia Tbk (IDX: BBRI) and power producer, PT Perusahaan Listrik Negara.

Then large public services such as food supplier company, Perum Bulog, and unclear companies. He urged, “Companies that are not clear we will be merged or liquidated. I’m waiting for the president’ and minister’ approval on this plan.”

He gave an example, in June, the ministry will finalize hospital cluster under the SOEs. The ministry also considered to creates mining cluster, transportation cluster, hospitality cluster, manufacturing cluster, and others.

“We will combine the hospitals and will have 6,400 beds and it will become the largest company in the country. With this grouping, expertise and company performance will be created,” said Thohir.

He affirmed will not tolerate projects based on individual or mob decisions at the companies and must be clear. He added, all SOEs must have a plan for what to do in terms of technology, not only business as usual but there must be a new way.

“Investment policies must be clear and human resource development must continue to be upgraded. The role of the commissioner must be active by not taking on the role of directors,” said the minister.

Since lead the ministry, Thohir, has make transformation by picked two vice ministers, cut the number of deputies to only three positions from seven positions. The fresh move aims at carrying out President Joko Widodo’ mission regarding the creation of an effective and efficient bureaucracy.

“This is part of the Tour of Duty. The bureaucracy must understand the problems in the corporation as carried out today,” he said.

Thohir already has two deputy ministers – Budi Gunadi Sadikin and Kartika Wirjoatmodjo – and already have their respective work posts.

“Besides deputy, a review for employees under him will also be carried out immediately, in accordance with the direction of the president to accelerate the movement in building this nation, this is the time for bureaucratic efficiency,” adds by Thohir.

The bureaucracy reform agenda was announced by Widodo in his inauguration speech fro the second term which was delivered in the plenary room of House of Representatives month ago.

“To manage the Rp8,200 trillion (US$512.5 billion) assets, I need teamwork, which is filled with people who are not only smart but also good morals,” said the minister.

Widodo said earlier that downsizing the bureaucracy in SOEs could help accelerate state-owned companies in the global arena.

“I hope that there will be a big leap in evaluating existing assets, to find good partners so that our SOEs truly become companies that have a good reputation in the world,” the president said, adding there was homework that needed addressing including reviving PT Merpati Nusantara Airlines to fly again, returning the profits of Garuda, and settling the debt of local manufacture PT Krakatau Steel Tbk (IDX: KRAS).

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