Angkasa Pura II intensifies efforts towards privatization
The Jakarta Post, Jakarta
State-owned airport operator PT Angkasa Pura II expects to spin off the Soekarno-Hatta international airport by the end of this month to clear the way for the privatization of the country's largest airport.
"The preparation for the spin-off is nearing the end; we're expecting the process to be completed by the end of February," president of Angkasa Eddy Haryoto told reporters on Thursday on the sidelines of the hearing with the House of Representatives's Commission IX for financial affairs.
After the spin-off process is completed, the government will sell a 10 percent stake in the airport through a strategic sale mechanism, he said, but he fell short of mentioning the expected proceeds from the sale.
Initially, the government planned to complete the privatization of the airport by November 2002, but it was delayed because the government remained undecided as to whether to sell its stake to public or strategic buyers.
Eddy said that the spin-off move would help smooth the privatization to avoid further delays.
Angkasa Pura II, which operates 10 airports in the western part of Indonesia, is among three companies which were originally slated for sale in 2002. The other two are Bank Mandiri and pharmaceutical firm PT Kimia Farma, whose sales have also been delayed.
The sales of the three companies will come on top of the ten new state firms scheduled to be sold this year, with the goal of raising Rp 8 trillion (about US$880 million) in proceeds to help cover the 2003 budget deficit, earmarked at Rp 34 trillion.
Eddy said that if the sale of the first 10 percent stake was successful, another 35 percent stake in the company would be up for sale in the next three years, also via strategic sales.
Among the foreign investors who have expressed their interest in purchasing the company, said Eddy, were international airport operators such as the British Airport Authority and the operators of airports in Amsterdam, Frankfurt, Stockholm and Hong Kong.
At the hearing however, some legislators warned that executing the plan at a time when the investment climate in the country was relatively poor would only bring in little interest from investors. As such, bidders, if any, would predictably offer low prices for the airport.
Other lawmakers even suggested the program be canceled until the country had a privatization law to provide a legal basis for the sale of the airport, and to prevent a potential backlash from the public in the future.
The privatization law is being drafted by the government.
Recently, the government faced widespread criticisms from various groups representing the public over its move to sell its stake in telecommunication firm PT Indosat.