E. Java Council wants coal briquettes project canceled

The deputy chairman of the East Java Legislative Council's Commission E, Mukmin Baisuni of the military/police faction, said the coal briquette project in Gresik, owned by state-owned coal miner PT Bukit Asam, should be disbanded altogether as it continued to book losses because of various inefficiencies.

"If it is not disbanded soon, the losses which must be borne by the government will continue to expand. How it can make a profit, if its production costs soars to Rp 1,350 a kilo of briquette, while it sells the briquette only Rp 300 a kilo," Mukmin said at a hearing with contract workers at the briquette project.

The contract workers have been staging demonstrations against the company's plan to fire all contract workers in an effort to improve its efficiency.

But a representative of contract workers, Wahyu Hidayat, also chairman of a labor union at the company, said efforts to improve efficiency should not be pursued by firing all contract workers but by improving the company's operation and controlling the company's finances.

He noted that the company spent only Rp 54 million a month to pay contracts workers, compared to Rp 150 million to pay its permanent employees, whose number totaled 60 people.

Wahyu said Bukit Asam could improve efficiency in the coal briquette project in Gresik by improving the procurement mechanism.

He suspected that much money had been wasted just because of improper procurement procedures. He noted that the machinery used in the project was mostly old machines, which broke down almost everyday. And of course, this has resulted in the high cost of maintenance.

Wahyu also suspected that there was inefficiency in the procurement of spare parts. Many times, when the machines broke down, the company could not find the spare parts in the warehouses. At the same time, the warehouses are full of spare parts which are not often required for the maintenance purposes. (*)