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)