W. Sumatra denies seizure of cement firm<\/p>\n
Adianto P. Simamora and Berni K. Moestafa, The Jakarta Post,
\nJakarta<\/p>\n
Signaling that it was backing down from its controversial
\nplan, the West Sumatra administration said on Monday that it had
\nno intention of unilaterally taking over local cement-maker PT
\nSemen Padang.<\/p>\n
"There has been no expropriation of Semen Padang, the takeover
\nstatement is untrue," West Sumatra Governor Zainal Bakar told
\nreporters after meeting with Coordinating Minister for the
\nEconomy Dorodjatun Kuntjoro-Jakti and State Minister for State
\nEnterprises Laksamana Sukardi at the finance ministry office.<\/p>\n
Separately, the World Bank urged the government on Monday to
\nimmediately resolve the Semen Padang case, warning that the
\nunilateral move by the West Sumatra administration could tempt
\nother regions to take similar action with state companies.<\/p>\n
"It's important that the government resolve this issue
\nquickly," World Bank senior economist Vikram Nehru told
\nreporters, pointing out that the central government must overrule
\nthe move by the provincial administration.<\/p>\n
"Clearly, if this decision is allowed to stand then it will be
\na big blow to the privatization program of the government.<\/p>\n
"It will lead to tremendous investor wariness and uncertainty
\nabout the future possibilities of privatization," he said.<\/p>\n
The West Sumatra administration declared last week that it had
\ntaken over the local unit of state-owned cement maker PT Semen
\nGresik to protest the government's plan to sell a majority stake
\nin the state firm to Mexico-based cement giant Cemex SA de CV.<\/p>\n
The move was approved by the provincial council, saying that
\nstarting from Nov. 1, Semen Padang was temporarily under the
\ncontrol of the people of West Sumatra and had been transferred to
\nthe West Sumatra government.<\/p>\n
The illegal takeover was strongly criticized, as it could have
\nfurther damaged the country's reputation in the international
\nbusiness community and hampered the economic recovery process.<\/p>\n
Analysts have said that the move was purely intended to
\nprotect the interests of certain members of the local political
\nelite in retaining Semen Padang as their main cash cow.<\/p>\n
Zainal declined to say much about the outcome of his meeting
\nwith the top economic ministers.<\/p>\n
He said that the government had formed a special team to
\nresolve the issue, and that the final decision was now in the
\nhands of Dorodjatun.<\/p>\n
But Zainal insisted that the West Sumatra demand for Semen
\nPadang to be spun off from Semen Gresik remained.<\/p>\n
Separately, the South Sulawesi government reiterated on Monday
\nthat it would not take over the operations of PT Semen Tonasa,
\nanother unit of Semen Gresik operating in the province.<\/p>\n
"We will not follow West Sumatra's move, but we are firm in
\nour demand to spin off Tonasa from Gresik," Syamsul Alambulu, a
\nsenior official in the South Sulawesi capital of Makasar and head
\nof the spin-off team said, as quoted by Reuters.<\/p>\n
However, he warned that an ultimatum was being prepared,
\ngiving the central government six months to spin off Tonasa.<\/p>\n
"If the government fails, steps will be taken," Alambulu said.
\n"But not in the form of taking over Tonasa unilaterally, because
\nwe understand how difficult it is for the government to settle
\nthis problem.<\/p>\n
The local protest has hampered the government's effort to sell
\na 51 percent stake in Semen Gresik to Cemex via a put option
\n(shareholder's contractual right to sell) that had to be extended
\nfrom the initial Oct. 26 deadline to Dec. 14.<\/p>\n
Cemex, the world's third-largest cement maker, already owns 25
\npercent of Semen Gresik.<\/p>\n
The government had initially hoped to raise around $520
\nmillion from the Semen Gresik sale, which is some 80 percent of
\nthe government's 2001 privatization proceeds targets of Rp 6.5
\ntrillion (about $634 million).<\/p>\n
No proceeds have been collected from privatization as yet.<\/p>\n
Elsewhere, Nehru would not speculate on whether the takeover
\nmoves would affect the outcome of this week's Consultative Group
\non Indonesia (CGI) donors' meeting.<\/p>\n
The government is planning to request $3 billion to $4 billion
\nin new loans to help finance the 2002 state budget deficit from
\nthe country's traditional donors.<\/p>",
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