“The BUMD Bill will soon be submitted to the House of Representatives by the government. With this, the government is confident that BUMDs will be able to level up,” he said in a statement issued in Jakarta on Thursday.
According to Karsayuda, the government’s initiative stems from concerns over the current condition of BUMDs.
Out of 1,571 BUMDs with total assets exceeding Rp1,200 trillion (about US$75 billion), around 70 percent are in poor condition due to mismanagement, excessive political interference, and incompetent management.
“We have found BUMN executive or management — whether supervisory boards, commissioners, or directors — who lack competence and were appointed by the directly elected regional head,” he said.
To address the issue, the government is also planning to establish a Directorate General for BUMD Development and Supervision at the Echelon I level under the Ministry of Home Affairs.
Currently, BUMD oversight and development are handled by Echelon III officials, whose authority is considered inadequate to address the complexities of such businesses.
In addition to upgrading BUMDs, Karsayuda said he hopes that the proposed BUMD Bill will encourage consolidation among BUMDs across cities and provinces.
“If state-owned enterprises (BUMN) have Danantara, then BUMDs should also be capable of financing, both national strategic projects implemented at the regional level and local strategic projects, that don’t need to rely entirely on the state budget,” he explained.
Commission II has also asked the central government to grant it greater authority to supervise and evaluate BUMDs—from the stage of their establishment and management to evaluation and development, including the authority to freeze or dissolve BUMDs that fail to contribute to regional economic growth.
Earlier, during a working meeting and public hearing on July 16, 2025, Minister of Home Affairs, Tito Karnavian, called on Commission II to support the formation of the BUMD Law.
“We kindly ask Commission II of the House to support the establishment of a law on BUMDs to more firmly regulate the management of BUMDs, based on government initiative. We will prepare the draft,” Karnavian said.
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Translator: Melalusa Susthira, Kuntum Khaira Riswan
Editor: Primayanti
Copyright © ANTARA 2025
