Friday, November 8, 2024

Erick advances mergers of SOEs to boost efficiency, competitiveness

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Julian Isaac

Journalist

Editor

Interview

The Ministry of State-Owned Enterprises is intensifying efforts to transform state-owned enterprises (SOEs) by consolidating companies with similar businesses.

The vision of SOEs Minister Erick Thohir’s vision, includes streamlining the number of SOEs from 47 to 30, organized them into 11 clusters, as a continuation of his earlier work in which he reduced the number of SOEs from 114 to 47.

In his recent address, Thohir emphasized that consolidating companies with overlapping business areas would enhance their operational strength and align with national objectives such as food self-sufficiency.

For instance, he proposed merging State-owned plantation company PT Perkebunan Nusantara (PTPN) and Perum Perhutani, which would combine land assets to create an area of 2.2 million hectares.

This extensive land base could support initiatives for increased agricultural production, aligning with government food security goals.

Additionally, Thohir suggested merging the state-owned shipping companies, PT Pelni and PT ASDP Indonesia Ferry, aiming to strengthen Indonesia’s maritime capabilities and optimize port access for imports.

This move, he argued, could also curb import dumping, which has negatively impacted local small and medium-sized businesses.

In the healthcare sector, Thohir proposed integrating SOE-owned hospitals under PT Bio Farma, the parent company of the SOE healthcare group.

This alignment would create a comprehensive health system that links pharmacy services, healthcare production, and hospital facilities under a single network, potentially enhancing the national healthcare system’s efficiency.

The consolidation effort also extends to the construction sector, where the Ministry is set to merge seven SOE contractors into three specialized entities.

For example, PT Hutama Karya and PT Waskita Karya will focus on toll road and institutional building projects, while PT Wijaya Karya and PT PP will concentrate on seaport and airport infrastructure.

PT Adhi Karya and PT Nindya Karya will primarily handle water infrastructure and railway projects.

As Thohir collaborates with relevant ministries, including the Ministry of Public Works and the Ministry of Public Housing, he remains optimistic that these mergers will lead to financially healthy and competitive SOEs, capable of driving Indonesia’s economic progress.

Julian Isaac

Journalist

 

Editor

 

Interview

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