Bank, mining SOEs on top of govt list for privatization

Bank, mining SOEs on top of govt list for privatization

The Jakarta Post, Jakarta

In a reversal from his initial position, State Minister of State
Enterprises Sugiharto said the government would fulfill its Rp
3.5 trillion (US$368 million) privatization target by selling
some of its stakes at state-owned banks and mining companies
before the end of 2005.

"I can't name the firms yet due to capital market
regulations," he said on the sidelines of a joint session with
four commissions of the House of Representatives on Monday.

Sugiharto's announcement was a reversal from his initial
position last week, when he had recommended to the Ministry of
Finance that the current privatization target of Rp 3.5 trillion
be replaced with a similar sized dividend target, bringing up the
total dividend projection from Rp 9.5 trillion to Rp 13 trillion.

He said his opposition to the privatization goal stemmed from
the fact that current market conditions were not favorable.
However, he would oblige if the House of Representatives and the
government decided to keep that target.

"As an aide to the president, I will carry out whatever is
decided."

Sugiharto acknowledged that so far his office had not yet
taken in any revenue from the privatization program. "But we will
reach the privatization and dividend targets by the end of the
2005 fiscal year."

He said the timing, size and price of the sales of the bank
and mining firm stakes would depend upon the market.

"We don't want to sell at a cheap price," said Sugiharto.
"We'll find the right time ... we still have six and a half
months."

The state minister office website lists five banks and five
mining firms in its directory.

Three banks -- Bank Mandiri, Bank Negara Indonesia and Bank
Rakyat Indonesia -- are publicly listed, with the government
owning 69.51 percent, 99.11 percent and 58.98 percent of the
shares, respectively. The other two banks, Bank Ekspor Indonesia
and Bank Tabungan Negara, are not listed on the stock exchange.

Similarly, three of the mining companies -- PT Aneka Tambang,
PT Tambang Batubara Bukit Asam and PT Tambang Timah -- are
publicly listed, with the government owning 65 percent, 67.82
percent and 65 percent of the shares respectively. Oil giant PT
Pertamina and asphalt mining firm PT Sarana Karya are the other
two state-owned mining companies.

Legislator Dradjad Wibowo of Commission XI on finance and
banking said he opposed any privatization plans for the year,
especially if they were done just to fulfill loan requirements
from the Asian Development Bank.

"We used to privatize to pay off loans, now we are privatizing
to obtain loans," he said. "I fully agree with the Vice
President's stance."

Wibowo was referring to last week's statement by Vice
President Jusuf Kalla last week, who said the government should
not bow down to any requests from donor institutions and that
selling the government's stakes in state enterprises was the
lowest priority for the government.

Kalla, however, also supported Sugiharto, saying the
government could bring in more money to its coffers by maximizing
dividend payments from state enterprises.

However, Coordinating Minister for the Economy Aburizal Bakrie
reiterated the government's commitment to reach the Rp 3.5
million privatization goal.

"The privatization will go on, but the government has to get
maximum revenue. Otherwise, we won't sell (the firms)." (002)