50 percent of state firms are unhealthy

JAKARTA (JP): At least 50 percent of the 164 state companies are unhealthy, a senior government official said here yesterday.

Marzuki Usman, secretary to the State Minister of the Empowerment of State Enterprises, said that based on half-yearly reports, last year, 78 of the 164 state companies were in poor financial condition.

He said the number of ailing companies would have increased this year as a result of the severe impact of the economic crisis on their activities.

"I think the number of unhealthy state corporations will continue to increase due to the crisis," he told the audience at a seminar organized by PT Sucofindo.

There are 164 state-owned companies. Their total combined assets were worth Rp 461.6 trillion (US$57.7 billion) at the end of last year.

Marzuki declined to name the unhealthy corporations.

But he did say that the state-owned airline Garuda Indonesia and electricity company PT PLN, both of which play a vital role in the country's development, were suffering severe financial problems.

PLN is expected to suffer a loss of at least Rp 6 trillion ($800 million) this year because of the sharp depreciation of the rupiah against the U.S. dollar.

Garuda Indonesia is reported to have had problems meeting payments due on leased aircraft because of the weak currency.

Marzuki added that the 70 percent fall in the value of the rupiah against the dollar since July last year had affected almost all state companies.

The rupiah touched its lowest level of Rp 16,800 to the dollar in January this year, but has recently been moderately stable, trading at around Rp 8,000 to the U.S. dollar for a number of weeks.

Marzuki said the newly established office of State Minister of the Empowerment of State Enterprises would concentrate on privatizing certain state corporations, as agreed with the International Monetary Fund (IMF) early last month.

"Our top priority now is the privatization of 12 companies," he said, declining to reveal which companies would be first to be sold off.

The government has identified seven state firms to be privatized during this financial year and five other listed companies in which the government will reduce its stake.

The seven companies to be privatized are port management firms PT Pelindo I and PT Pelindo II, oil palm plantation firm PT Perkebunan Nusantara IV, toll-road operator PT Jasa Marga, coal mining firm PT Tambang Batubara Bukit Asam, steel maker PT Krakatau Steel and airport management firm PT Angkasa Pura II.

The five listed firms in which the government will reduce its stake are PT Telkom, PT Indosat, cement manufacturer PT Semen Gresik, nickel and gold mining company PT Aneka Tambang and mining firm PT Tambang Timah.

The government previously forecast that it would raise around Rp 15 trillion from the sell-off. (aly)