GOVERNMENT TO SAVE PAL INDONESIA

Jakarta, June 8 (ANTARA) - The government has pledged to rescue state-owned shipbuilding company PT PAL Indonesia from possible bankruptcy.

"To save the state owned company, we need funds from the State Budget (APBN)," State Enterprise Minister Sofyan Djalil, said in a working meeting with the Commission VI of the House of Representatives (DPR), at Parliament Building, on Monday.

According to Sofyan Djalil, the government through the Asset Management Company (PPA), was trying to save PT PAL, by among other things restructuring the company.

In the meeting with the Parliament, Azman Azzam, a member of the House's Commission VI, urged the government to save the naval shipbuilding industry, which is an important national asset.

"PT PAL has a sound business prospect because it has a big potential market. However, the company's performance is not that good because its policies often changed, as members the the board of directors changed," Azzam, a legislator of the Democratic Party (PD), said.

The minister said the saving of PT PAL would be a long process and must involve many institutions, including the finance ministry.

He said the problems in PT PAL now were because of mistakes in the past.

"There was no serious care in the past, so it has caused losses and finally burdened the company," he said.

The minister said the shipbuilding industry had in fact gotten contracts for the productions of around 20 ships, but because there was no attention especially during the financial crisis, the company lost its income potential.

When the contracts were made, the steel price increased and so the production cost, leading the accumulation of the company's losses, he explained.

However, despite the problems, the state enterprise ministry could not declare the company bankruptcy right away.

He said the company's debts should be settled before inviting investors to revive the shipbuilding plant. ***