TEMPO.CO, Jakarta - Indonesia's House of Representatives (DPR) Commission II member Ahmad Irawan has called on the Ministry of Home Affairs and the Ministry of State Apparatus Utilization and Bureaucratic Reform (PAN-RB) to establish a directorate dedicated to overseeing Regional-Owned Enterprises (ROEs).
Ahmad said his proposal stems from the high number of loss-making ROEs, emphasizing the need for stronger central government oversight and regulation of their performance nationwide.
"I previously conveyed to the Ministry of Home Affairs that this falls under their authority. However, ROE matters are currently handled only at the sub-directorate level. It would be more appropriate for this responsibility to be elevated to the director level within a dedicated directorate. This formation should be expedited with PAN-RB’s approval," Ahmad stated in a written statement to Tempo on March 6.
The Golkar Party legislator noted that during Commission II’s working meeting with the Ministry of Home Affairs, it was revealed that most ROEs were facing financial and operational difficulties.
"In our view, ROEs should be driving local economic potential and generating profits rather than becoming a burden on regional budgets," he said.
Irawan specifically criticized the performance of ROEs managing clean water services, such as Regional Drinking Water Companies (PDAM), which, despite holding exclusive rights to manage water resources granted by the state, continue to suffer financial losses.
"The Constitution clearly states that natural resources, including land and water, are managed by the state. PDAMs are the only entities permitted to manage water resources, yet many are still operating at a loss," he said.
He contrasted this with Regional Development Banks (BPDs), another type of ROE, which are subject to stricter regulations and oversight but generally generate profits for regional governments.
"Unlike PDAMs, BPDs are supervised not only by the Ministry of Home Affairs but also by the Financial Services Authority (OJK) and Bank Indonesia (BI). This is precisely why we are pushing for the Ministry of Home Affairs to elevate ROE oversight from the sub-directorate level to a full directorate," he explained.
The legislator from East Java’s fifth electoral district added that given the country’s current economic conditions, Indonesia needs innovative financial sources to boost national economic growth. In this context, ROEs should be able to provide substantial benefits to the public.
"The Ministry of State-Owned Enterprises (SOEs) alone has successfully optimized SOE assets and established the Danantara Investment Management Agency with significant capital," he noted.
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