Government to raise Rp 8t in privatization proceeds<\/p>\n
Fitri Wulandari, The Jakarta Post, Jakarta<\/p>\n
The government said on Tuesday it could rake in around Rp 8
\ntrillion (US$946.74 million) in privatization proceeds this year,
\nhigher than its target of Rp 6.1 trillion.<\/p>\n
"... We can get Rp 8 trillion by the end of this year,"
\nMahmudin Yassin, deputy for privatization and restructuring at
\nthe Office of the State Minister for State Enterprises, said.<\/p>\n
He said the higher privatization revenue was due to the
\nsuccessful initial public offering (IPO) of state-owned Bank
\nRakyat Indonesia (BRI).<\/p>\n
The upcoming IPO of state-owned gas utility PT Perusahaan Gas
\nNegara (PGN) in December was also expected to be successfully
\ncompleted, he said.<\/p>\n
The government has sold stakes in a number of state-owned
\nenterprises as part of a privatization program to raise cash to
\nhelp finance this year's state budget deficit.<\/p>\n
At present, the government has collected a total of Rp 3.6
\ntrillion. Some Rp 2.5 trillion came from the IPO of state-owned
\nBank Mandiri in August, while the remaining Rp 1.1 trillion was
\nfrom the sale of shares in publicly-listed cement producer PT
\nIndocement.<\/p>\n
The IPO of Bank BRI, which started on Monday and would be
\ncompleted on Wednesday, is expected to raise a record Rp 4.17
\ntrillion in proceeds, of which Rp 2.6 trillion would go into the
\nstate coffers, while the remainder would go to the bank.<\/p>\n
The IPO, which is the country's largest since the 1997
\neconomic crisis, has received strong interest from investors both
\nat home and overseas.<\/p>\n
The government is now preparing to sell shares in PGN, hoping
\nto raise between Rp 1.5 trillion and Rp 2 trillion.<\/p>\n
The relatively successful IPO of the state-owned companies was
\nin contrast to last year's privatization program, which generally
\nfailed to garner sufficient interest due to various factors such
\nas strong opposition from the public and poor preparation.<\/p>\n
The government has insisted that privatization of state-owned
\ncompanies was a crucial program not only to provide cash for the
\nstate budget, but also to boost good corporate governance in the
\ncompanies, which had long been treated as the cash cows of well-
\nconnected people.<\/p>\n
Privatization proceeds will become a more important source of
\nrevenue for the government in the future, particularly as the
\ncountry would no longer be eligible to certain financing
\nfacilities from the Paris Club of creditor nations after the
\nInternational Monetary Fund ends its program here by the end of
\nthis year.<\/p>\n
In 2004, the government hopes to raise Rp 10 trillion from
\nselling state-owned enterprises, as stated in its draft 2004
\nstate budget.<\/p>\n
Elsewhere, Mahmudin said the government might approve a
\nproposal from the PGN management to raise the size of the IPO to
\n39 percent of total shares from the initial plan of 30 percent to
\nensure sufficient proceeds for the company to help finance its
\ngas pipeline construction projects.<\/p>\n
The House of Representatives has previously only approved the
\nsale of 30 percent shares in PGN.<\/p>",
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