Angkasa Pura wants Jakarta airport royalties

Angkasa Pura wants Jakarta airport royalties

JAKARTA (JP): PT Angkasa Pura II, the state-owned airport
operator, has asked that it continue to receive royalties from
Soekarno-Hatta International Airport after it is privatized.

The company made the request because it says it needs the
funds to help pay for the operation of the other nine airports
under its management.

Soekarno-Hatta accounts for about 80 percent of Angkasa Pura
II's total earnings, and its divestiture will mean a significant
loss for the company, president Miskul Firdaus said during a
hearing with the House of Representatives on Wednesday.

"(Because of the privatization), the company will lose its
largest source of revenue," Miskul said, adding that Soekarno-
Hatta virtually subsidized the operations of the other airports.

Falling short of calling for a suspension of the privatization
process, he proposed that Angkasa Pura continue to receive some
royalties from the airport, though he did not elaborate on his
proposal.

Angkasa Pura II also operates the Sultan Iskandar Muda Airport
in Banda Aceh, Polonia Airport (Medan), Tabing Airport (Padang),
Sultan Syarif Kasim II Airport (Pekanbaru), Sultan Mahmud
Badaruddin II Airport (Palembang), Supadio Airport (Pontianak),
Husein Sastranegara Airport (Bandung), Halim Perdanakusumah
Airport (Jakarta) and Kijang Airport (Tanjung Pinang).

Soekarno-Hatta airport, which is located in Tangerang, near
Jakarta, is one of eight state enterprises earmarked for
privatization by the government, which hopes to raise Rp 6.5
trillion (US$684 million) to help finance the 2001 state budget
deficit.

Miskul pleaded his case for continued royalties during a
hearing with House Commission IV for infrastructure and
transportation affairs. The hearing also was attended by
executives of Angkasa Pura I, which operates 13 airports,
including ones in Bali and Surabaya.

Angkasa Pura II booked Rp 1.29 trillion ($136 million) in
earnings last year, an increase of about 60 percent from the
previous year, Miskul said when disclosing the company's
unaudited financial results. It had a pretax profit of Rp 522.10
billion, up from Rp 280.13 billion the previous year.

Miskul said Soekarno-Hatta airport would be privatized through
direct placement offers to potential strategic partners, not
through an initial public offering.

This will give the government the opportunity to select its
partners, he said.

"The partners will come from professional players in the
airport business," he added.

The direct placement also will make the transfer of technology
and skills easier to carry out, he said.

The government intends to sell a 50 percent stake in Soekarno-
Hatta airport -- valued at an estimated Rp 3.5 trillion ($368
million) at the end of 2000. Bidders for the stake have included
the companies that manage the Dutch Schipol Airport and Aeroport
de Paris, and the British Airport Authority.

No decision has been made because all of the bidders offered a
price lower that what was hoped for by the government, he said.
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