Wednesday, December 6, 2023

SOE Ministry Drafts Blueprint to Cool Down Private vs State Company Competition

Jayanty Nada Shofa
August 14, 2023 | 7:04 pm
The progress of the ministers' housing project as reflected on a worker's sunglasses in Nusantara, East Kalimantan, on Feb. 28, 2023. (Antara Photo/Indrianto Eko Suwarso)
The progress of the ministers' housing project as reflected on a worker's sunglasses in Nusantara, East Kalimantan, on Feb. 28, 2023. (Antara Photo/Indrianto Eko Suwarso)

Jakarta. The State-Owned Enterprises (SOE) Ministry on Monday is drafting a blueprint that is expected to divide the roles between private and state companies to prevent them from fighting over the same project. The ministry is also working alongside the Indonesian Chamber of Commerce and Industry (Kadin) to design the blueprint.

According to Deputy SOE Minister Kartika Wirjoatmodjo, the blueprint is set to give Indonesia’s state and private-owned companies a better picture of what their roles are across infrastructure, energy transition, health, and banking sectors. In other words, the document will lay out which part of the job goes to Indonesian SOEs and which ones will be handled by private firms. This includes projects related to the construction of Indonesia’s new capital Nusantara as well as Indonesia’s electric vehicle (EV) battery ecosystem and renewable power generation.

“Kadin and our SOEs have gathered today to discuss [who will do what in] the aforementioned sectors. So we will map out the roles of the private and state enterprises over the next five years,” Wirjoatmodjo, also known as Tiko, told reporters on the sidelines of a Kadin-SOE Ministry forum in Jakarta on Monday.

“For instance, there are many opportunities when it comes to solar and wind power plants. We should sit together to define the roles that [state utility firm] PLN and the private sector play. And discuss how we can create a mutually beneficial business model. This way, the private sector and SOEs can work together,” Tiko, who serves as a Kadin deputy chair, said.


He added: “We will likely release the blueprint two months from now.”

Earlier in the day, Kadin chairman Arsjad Rasjid revealed that state and private companies would often work on projects within the same field, particularly developed sectors. This leads to competition between one another. 

“We need a win-win solution. One that implements the right company at the right place principle. SOEs are a pioneer in developing undeveloped industries and serving underserved areas. The private sector is developing industries and regional economies based on economic principles,” Arsjad said.

Pro-Business Policymaking
The blueprint in question also seeks to nudge the government into issuing business-friendly policies. SOE Minister Erick Thohir told the same forum that Indonesian state and private bodies were in the same boat. Both companies had to face intricate policies when doing business.

 “Let us make a blueprint which we can propose to the government for a more pro-business [policymaking]. So the government will not issue policies that hold us back,” Erick said.

“SOEs and the private sector are facing the same problem: complicated regulations that stop us from making breakthroughs, be it an industrial estate or a special economic zone," the minister said.

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