Issues within SOEs Fends Off Private Investors, Says Observer

TEMPO.CO, Jakarta - Public policy observer from the Jakarta Citizen Forum (Fakta) Azas Tigor Nainggolan says the level of corruption in the directional-level often frights investors from the private sector from investing in the country’s state-owned enterprises (SOE).

Azas also highlighted the regulatory and legal uncertainty that still poses a challenge from conducting any form of partnership.

“This is a major issue for SOEs. There are many cases of failed partnerships between the private sector and SOEs and sometimes sees these issues end up as disputes. Pressures from many interests would then hamper a good partnership midway through,” said Azas Tigor Nainggolan on Tuesday, August 20, at the Graha CIMB Niaga.

Tigor argues that this situation becomes a bad precedent for the investment climate and is hampering investors from opening partnerships with SOEs. He also believes the situation may slow-down the development that the government hopes for.

He gave examples of the legal disputes between PT. Karya Citra Nusantara (KCN) – a subsidiary of a partnership between SOE Kawasan Berikat Nusantara (KBN) and PT. Karya Teknik Utama (KTU) – that saw KBN filing a lawsuit against PT KCN. He says this case is enough evidence of the lack of legal protection for the private investors that partners with SOEs.

HENDARTYO HANGGI