Jakarta. Indonesia’s most populous province, West Java, is planning to set up a superholding for its regional government-owned businesses, similar to what the sovereign fund Danantara is doing.

The region's rule-making body Bapemperda DPRD revealed that work is underway to draft the regulation. Its establishment will take into account the region's fiscal conditions and business models.

“Our enterprises must not treat the regional state budget as an ‘ATM’. They should be able to stand on their own two feet, embracing good corporate governance and generating impactful dividends to boost the regional income,” the body’s deputy chief Daddy Rohanady was recently quoted as saying by the state news agency Antara.

West Java’s Bapemperda DPRD will also take a look at how Jakarta runs its businesses for reference.

The West Javan government is planning to form the Sanggabuana Holding by August 2026.

Regional secretary Herman Suryatman said that the feasibility studies had shown its establishment was possible. However, Herman said that they would not merge Bank BJB into the holding.

Earlier this year, West Java Governor Dedi Mulyadi complained that the investment firm Jasa Sarana had only generated Rp 38 billion ($2 million) in dividends over the 2 decades of its establishment, despite receiving a Rp 830 billion ($46.1 million) injection, according to a government statement. 

Dedi also slammed the mammoth-sized gap in the tourism company Jaswita. Despite possessing Rp 2.7 trillion ($150 million) in assets, the company's dividend payments to the provincial government remained lackluster. Hotel Salak, managed by Jaswita, for example, only contributed around Rp 1.9 billion ($105,609) annually.

The government also owns the agrobusiness firm Agro Jabar and energy firm Migas Hilir Jabar.

The Sanggabuana move is similar to Danantara’s strategy of creating holding firms to consolidate state-run businesses of similar nature for better efficiency. The fund wishes to cut a network of over 1,000 state-owned entities, including its sub-subsidiaries, to just 200-300 core companies. All state enterprises are now under Danantara's wings.