Analysts call for clear, accountable privatization plans
Analysts call for clear, accountable privatization plans
JAKARTA (JP): The government should create action plans to privatize state firms and put them into a privatization bill to make them more accountable, analysts have said.
Djisman S. Simandjuntak, executive director of the Prasetiya Mulya School of Management, told a seminar last week that the government currently does not have clear plans of how to privatize state firms.
He suggested that ministers should draft transparent action plans to give a clear direction to its current privatization program.
"Considering the complications and wide implications of privatization, such action plans should be prepared to include as many stakeholders as possible," Djisman told the seminar, hosted by the Management Institute of the University of Indonesia.
Stakeholders should include employees of state firms, their pension funds, local administrations where state firms are located, cooperatives they are nurturing and the surrounding community.
"Such comprehensive action plans should then be incorporated into a law, just like that on the state budget," he continued.
He noted that with such a law, the privatization program will be more accountable although still allowing the government flexibility over when to carry out the privatization of each state firm.
Minister of Finance Mar'ie Muhammad has said that the government will take a number of measures to improve the efficiency and competitiveness of state firms under a program to prepare them for going public.
Based on their business characteristics, Djisman noted that all of some 180 state-owned companies are eligible to be privatized.
The privatization of state firms can be done by selling some or all of the government's shares in the firms to the public through initial public offerings on stock markets or direct placements, Djisman noted.
However, for state-owned enterprises which suffer chronic losses, it is better for the government to liquidate them, he suggested.
"Whatever approach is used, transparency and fair competition should always be maintained," Djisman said.
The government revealed in December 1994 that out of some 180 state firms, 47 were categorized as unhealthy. Of the 47 firms, 15 were suffering chronic losses.
Monopoly
Christianto Wibisono, chairman of the Indonesia Business Data Center, said at last week's seminar that the government should first privatize state firms which hold monopolies on certain commodities, including cement, fertilizers and electricity.
"When talking about the privatization of state firms, the government should pursue it through an initial public offering of their shares rather than through direct placement," Christianto said.
The government has so far privatized four state firms, cement manufacturer PT Semen Gresik, telecommunications firms PT Indosat and PT Telkom and tin-mining firm PT Tambang Timah. The last three listed their shares on both foreign and local stock exchanges.
President of the Jakarta Stock Exchange Hasan Zein Machmud told the same seminar that at least 10 state-owned companies are qualified to go public during the next two years.
They are toll road operator PT Jasa Marga, PT Krakatau Steel, Bank Negara Indonesia 1946, PT Rajawali Musindo, fertilizer firms PT Pupuk Sriwijaya and PT Pupuk Kaltim, coal-mining firm PT Tambang Batubara Bukit Asam, general-mining firm PT Aneka Tambang and port operator PT Pelindo.
The government has said that it will prioritize the first three companies to go public either this year or next year. (rid)