Plans to Establish Regionally-Owned Enterprise Holding Company

Muhammad Khozin, a member of Commission II of the Indonesian House of Representatives (“DPR RI”), stated that his party and the Ministry of Home Affairs are preparing plans to establish a Regulatory Body for Regionally-Owned Enterprises (Badan Usaha Milik Daerah - “BUMD”).

“We need an umbrella in terms of regulations and institutions. The purpose is for evaluation, supervision, financial matters, and others,” Khozin told Hukumonline.

The agency will analyze the situation of BUMD and the characteristics of the local area. Its management is expected to move away from regional sectoral egos and prioritize professionalism. It is also possible that this agency could launch an Initial Public Offering (“IPO”) to help improve the health of the company.

The Regulatory Body is planned to be a single supervisory institution at the central level, functioning as a semi-superholding entity. Institutional strengthening could be achieved by adding the position of Director-General at the Ministry of Home Affairs, which oversees the institution.

“This is akin to a semi-superholding entity. Although it is not like Danantara, there is a sort of overarching framework in its management,” he said.