Dedi Mulyadi Will Cut Down Dozens of West Java BUMD into One Holding Next Week

JAKARTA - West Java Governor Dedi Mulyadi announced plans for a radical step to completely overhaul the structure of Regional Owned Enterprises (BUMD) in West Java by uniting them into a single super holding system starting next week.

This step was taken to stop the practice of ghost BUMD which only has a name without activity, and to break the tradition of placing the governor's success team in the ranks of directors and commissioners of regional companies.

"Next week there will be an MoU. All BUMD in West Java will be combined into one BUMD, outside the Bank of West Java Banten (BJB). So later there will only be two, BJB and one BUMD holding. It's not as messy as it is now," said Dedi Mulyadi in a discussion related to Danantara in Bandung, quoted by Antara, Friday, January 23.

Dedi emphasized that this concept adopts the Daya Anagata Nusantara (Danantara) Investment Management Agency (BPI) system which is applied at the national level. He assessed that consolidation is the only way to save the regional strategic assets worth Rp. 4 trillion which have been considered not to generate real profits for the regional treasury.

In his statement, Dedi openly dissected one of the inefficient practices he found, namely the electric car rental scheme by one of the BUMD to the provincial government with a value of up to Rp. 350 million per unit per year.

"That's in one year it spent more than Rp11 billion. I'm scratching now, because it's incredible. But the BUMD has no money so far. By the BUMD, the income of Rp11 billion was made again by a new subsidiary. To camouflage so that the money runs away," said Dedi.

Dedi mocked the phenomenon of regional company leaders who have a higher education background but failed to manage financial risks properly. He referred to the potential loss of almost Rp. 6 trillion that had threatened Bank Jabar in the past.

"I'd rather be led by a fool who understands than a smart person who is stupid," he said.

The most crucial point in this reform is the governor's commitment to keep BUMD away from political interference. Dedi stated that he would not make the position of director or commissioner a shelter for the successful team that helped him during the election.

According to him, the leadership of BUMD must be based on professionalism and neutrality because the orientation of the company is financial, not political.

Through this super holding, the West Java Provincial Government targets more targeted, transparent, and oriented asset management for regional economic downstreaming to make a real contribution to the West Java Regional Budget.

"The governor is usually confused about putting a successful team. So this successful team is the director of BUMD, this BUMD director. Well, later the governor will change, change everything, change again. Financial must be neutral from political intervention and from the placement of a successful team in management. And that's what I did in West Java. I don't want that," he said.