Dian Kuswandini, The Jakarta Post, Jakarta | Mon, 06/30/2008 10:49 AM | Headlines
The government's plan to integrate several state-owned construction companies into a holding company has been suspended following an alarm from the Business Competition Supervisory Commission (KPPU) saying it could lead to a monopoly.
State Minister for State-Owned Enterprises, Sofyan Djalil, said late last week his ministry needed to slow the move down and coordinate with the KPPU to ensure the holding company would not spark controversy or problems in the future.
"The KPPU said the holding company plan could lead to monopolistic practices," Sofyan said.
The government is planning to consolidate 14 construction companies into one holding company, which, according to Sofyan, is expected to strengthen state-owned enterprise (SOE) assets in terms of capital and human resources.
The state-owned construction companies include PT Adhi Karya Tbk, PT Wijaya Karya Tbk, PT Jasa Marga, PT Perum Perumahan, PT Bina Karya, PT Istaka Karya and PT Hutama Karya.
The creation of a holding, he said, would support and stabilize SOEs, accelerate their growth and open opportunities for them to expand overseas.
Besides setting up a holding company for the construction sector, the government plans to integrate some companies in other sectors, such as in the banking, mining, pharmacy and agricultural sectors.
"The government expects to complete all the plans by the end of the year," Sofyan said.
He said his ministry would consult with the KPPU to find the best way to consolidate the companies.
KPPU chairman Syamsul Maarif confirmed his office was studying the holding company plan for the construction firms.
"We have been studying the plan for two weeks and we will meet with the ministry soon," Syamsul said.
Therefore, he said, whether the holding company plan would be restricted or not would depend on studies and meetings.
"What we want to prevent is a monopolized market. As we know, currently, the construction firms are competing with each other. Bringing them together in one holding company would end that," Syamsul said.
He said the KPPU would only allow such a plan to continue if competition were guaranteed.
Sofyan said he would maintain competition among the firms despite the consolidation. "The firms will operate under the same management, however, their non-operational activities will be separate.
"We'll build what we call a firewall, which means the firms will be not allowed to share information on tender offers," Sofyan said.
He said the firewall would prevent price-fixing in such tenders.
The government's plan to integrate several state-owned construction companies into a holding company has been suspended following an alarm from the Business Competition Supervisory Commission (KPPU) saying it could lead to a monopoly.
State Minister for State-Owned Enterprises, Sofyan Djalil, said late last week his ministry needed to slow the move down and coordinate with the KPPU to ensure the holding company would not spark controversy or problems in the future.
"The KPPU said the holding company plan could lead to monopolistic practices," Sofyan said.
The government is planning to consolidate 14 construction companies into one holding company, which, according to Sofyan, is expected to strengthen state-owned enterprise (SOE) assets in terms of capital and human resources.
The state-owned construction companies include PT Adhi Karya Tbk, PT Wijaya Karya Tbk, PT Jasa Marga, PT Perum Perumahan, PT Bina Karya, PT Istaka Karya and PT Hutama Karya.
The creation of a holding, he said, would support and stabilize SOEs, accelerate their growth and open opportunities for them to expand overseas.
Besides setting up a holding company for the construction sector, the government plans to integrate some companies in other sectors, such as in the banking, mining, pharmacy and agricultural sectors.
"The government expects to complete all the plans by the end of the year," Sofyan said.
He said his ministry would consult with the KPPU to find the best way to consolidate the companies.
KPPU chairman Syamsul Maarif confirmed his office was studying the holding company plan for the construction firms.
"We have been studying the plan for two weeks and we will meet with the ministry soon," Syamsul said.
Therefore, he said, whether the holding company plan would be restricted or not would depend on studies and meetings.
"What we want to prevent is a monopolized market. As we know, currently, the construction firms are competing with each other. Bringing them together in one holding company would end that," Syamsul said.
He said the KPPU would only allow such a plan to continue if competition were guaranteed.
Sofyan said he would maintain competition among the firms despite the consolidation. "The firms will operate under the same management, however, their non-operational activities will be separate.
"We'll build what we call a firewall, which means the firms will be not allowed to share information on tender offers," Sofyan said.
He said the firewall would prevent price-fixing in such tenders.
