Central Java governor to close loss-making regional firms

Central Java Governor Ahmad Luthfi has declared his intention to shut down provincial-owned enterprises (BUMD) that are perpetually operating at a loss. He specifically highlighted PT Pusat Rekreasi dan Promosi Pembangunan (PRPP) as an example of a BUMD that needs to be addressed.

“

Our BUMDs that are losing money, I have threatened to close them down. Because why? Why should we maintain a BUMD if it doesn't generate income?

"Why should we maintain a BUMD if it doesn't generate income?" Luthfi stated during a plenary session at the Central Java DPRD office. He questioned the purpose of keeping companies like PRPP afloat when they consistently report losses, suggesting they should be closed and replaced with new ventures.

“

For example, PRPP, it keeps losing money. What's the point of having a company that loses money? Just close it, and make another company.

Luthfi acknowledged that closing a BUMD is not a simple process due to regulatory complexities. However, he stressed the importance of ensuring all aspects of BUMD operations, financial, operational, administrative, and governance, are healthy to support the Central Java provincial budget. He mentioned that PT PRPP has been in deficit since he took office as governor.

“

The problem is the regulations are difficult. This is our obligation so that all financial, operational, administrative aspects, and governance of our BUMDs must be healthy. What for? To support the revenue of the Central Java Provincial Budget.

Despite the losses, Luthfi indicated that the provincial government is still attempting to revive PT PRPP. Efforts include improving its management, organizing events, and developing a sports center on its premises. The governor's focus remains on making these regional enterprises contribute effectively to the provincial economy.

“

Since I took office (as Governor), it has been losing money.