Two PT PLN subsidiaries to go public<\/p>\n
JAKARTA (JP): Subsidiaries of the state-owned electricity
\ncompany PT PLN are to float their shares internationally in the
\nnear future, President Soeharto said yesterday.<\/p>\n
Speaking at the opening of a three-day working conference of
\nthe Ministry of Mines and Energy at the State Palace here, the
\nPresident cautioned that the international flotation should be
\nprepared carefully.<\/p>\n
\"The success of PT Tambang Timah (the state-owned tin mining
\nfirm) should be taken as a valuable lesson in the international
\nfloating of shares of other state companies,\" he said.<\/p>\n
Tambang Timah listed some of its shares on the London, Jakarta
\nand Surabaya stock exchanges last October.<\/p>\n
Last year PLN set up two subsidiaries -- PT PLN Pembangkit
\nJawa Bali I and PT PLN Pembangkit Jawa Bali II -- as preparation
\nfor its privatization.<\/p>\n
The two subsidiaries are assigned to manage electricity power
\nplants and distribution on Java and Bali.<\/p>\n
PLN, which had total assets of Rp 24 trillion (US$10.3
\nbillion) at the end of last year, expects to make a net profit of
\nRp 1 trillion this year.<\/p>\n
President Soeharto considered the international flotation of
\nstate-owned mining and energy companies as part of the
\ngovernment's efforts to promote the role of the private sector in
\nthese sectors.<\/p>\n
He noted that current development in the mining and energy
\nsector, particularly in the upstream industry, is still dominated
\nby state-owned enterprises.<\/p>\n
\"Due to financial constraints, the government cannot increase
\nits investment in these sectors and, therefore, is encouraging
\nthe private sector to take part in its development.\"<\/p>\n
Soeharto cited as an example the need to find new oil
\nreserves. \"If we don't find any new oil reserves, we'll become a
\nnet oil importer between the year 2005 and 2010,\" he said.<\/p>\n
The President also asked the Ministry of Mines and Energy to
\nimprove its efficiency. \"Every project that requires a big
\ninvestment should be very carefully assessed,\" he said.<\/p>\n
He called for a greater use of locally-made products in mining
\nand energy activities.<\/p>\n
At yesterday's inaugural ceremony, Minister of Mines and
\nEnergy I.B. Sudjana mentioned the need to streamline the
\nbureaucracy and to modernize state-owned enterprises.<\/p>\n
\"This is necessary to sharpen the competitive edge of our
\nmining and energy products,\" he said.<\/p>\n
He noted that one way to do it is to allow state-owned firms
\nto go public. Another way is by promoting what he called \"cross
\nfertilization\", cooperation, between subsidiaries of state-owned
\ncompanies or between them and other modern companies with better
\nmanagement.<\/p>\n
The ministry currently oversees seven state-owned companies:
\nPertamina, Tambang Timah, PT Tambang Batubara Bukit Asam, PT
\nAneka Tambang, PLN, PT Gas Negara and PT Koneba. There are 178
\nstate-owned companies in Indonesia.<\/p>\n
Minister of Finance Mar'ie Muhammad told the meeting that 86
\ncompanies have been assessed as less than healthy and not
\nentirely sound.<\/p>\n
\"This shows that they are not efficient and we are very
\nconcerned about their condition,\" Mar'ie said, in a written
\nspeech read out by Secretary-general of the Ministry of Finance
\nDono Iskandar.<\/p>\n
Mar'ie stressed that if the government continues to tolerate
\nsuch inefficiency, it may affect the national economy as the
\nstate companies operate in almost all its sectors.<\/p>\n
He said that state-owned companies, with total assets of Rp
\n300 trillion, should become the vanguard and backbone of the
\nefforts to improve overall economic efficiency.<\/p>\n
The inefficiency he blamed on two factors, namely poor
\nmanagement and too much government interference and said that
\nprivatization is the way to remedy the situation.<\/p>\n
\"We're currently finalizing a reform package for the state-
\nowned enterprises,\" he said, adding that it will be announced in
\nthe near future. (13)<\/p>\n
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