Banjarmasin (ANTARA) – Indonesia is preparing a sweeping overhaul of state and regional enterprises to tighten governance, shore up public finances and refocus companies on core public interests, a senior official said, underscoring President Prabowo Subianto’s push to clean up mismanagement.Deputy Home Affairs Minister Bima Arya Sugiarto said the president had flagged longstanding mismanagement at state-owned enterprises, or BUMN, including about 5,400 trillion rupiah (US$340 billion) in loans disbursed, much of it to corporations.“The president has conveyed that there has been mismanagement in BUMN management,” Bima said during a parliamentary working visit in Banjarmasin, South Kalimantan, on Friday.He added that state finances must prioritize fundamental public needs.Efforts to reform BUMN at the national level must be matched by improvements in regionally owned enterprises, known as BUMD, he said.The Home Affairs Ministry plays three roles — synchronization, acceleration and synergy — to align central and regional policies.It would be inconsistent to pursue serious restructuring of BUMN while BUMD continue to face structural problems ranging from weak governance and limited capital to unclear mandates between public service obligations and revenue generation, Bima said.The ministry and the House of Representatives’ Commission II are therefore preparing a comprehensive regulatory overhaul of BUMD through a draft law that will redefine their institutional framework.One key change would separate local governments’ roles as regulator and shareholder, a dual function that has created potential conflicts of interest. Under the proposal, BUMD governance would adopt more professional mechanisms, including clearer ownership structures and shareholder meetings.The draft bill would also establish distinct key performance indicators for public service functions and for financial performance, addressing longstanding ambiguity over whether BUMD should prioritize social services or local revenue.In addition, the reform would introduce more flexible capital access and asset management rules while maintaining strict oversight, allowing BUMD to operate more efficiently without compromising accountability.“This is a wake-up call for regions that there will be new ways of managing BUMD, just as there are new approaches for BUMN at the center,” Bima said.The broader goal is to build more professional, transparent enterprises that strengthen the national economy from the central to regional level.