BCA deal unlikely this year: Minister

BCA deal unlikely this year: Minister

Berni K. Moestafa, The Jakarta Post, Jakarta

Signaling a further setback in the privatization program, the
government said chances were slim for it to secure a deal for the
sale of a 51 percent stake in PT Bank Central Asia (BCA) by the
end of this year.

Coordinating Minister for the Economy Dorodjatun Kuntjoro-
Jakti attributed the delay, in part, to the long talks with
legislators when seeking their approval for the sale of BCA's 51
percent stake.

"We have lost precious time and may well not complete the
transaction before the end of the year," Dorodjatun said on
Wednesday in his opening speech before the participants of the
Consultative Group on Indonesia (CGI).

The CGI, grouping together Indonesia's major donor countries,
is holding a two-day meeting in Jakarta, which ends on Thursday,
to discuss new loans to help finance the country's 2002 state
budget.

Failure to complete a deal for BCA this year would become the
third delay of its sale since the sale program was launched in
early 2000.

The sale of BCA this year is part of the August 2001 Letter of
Intent (LoI) signed by the government, which forms the basis of a
US$400 million loan package from the International Monetary Fund
(IMF).

Under the LoI, the government promises to help cover the 2001
state budget deficit with Rp 27 trillion from proceeds of asset
sales and another Rp 6.5 trillion in privatization proceeds.

Last year, the IMF suspended a $400 million loan tranche to
Indonesia due to the government's delay of BCA's sale, which had
been requested by legislators.

Aside from BCA, the government has also been forced to delay
the sale of cement firm PT Semen Padang in West Sumatra due to
strong local opposition.

Dorodjatun said that the delay in the sale of the two
companies, exemplified the difficulties the government faced in
implementing its policies.

"The lesson from both of these cases has been that this
government must do a better job of explaining its policies to the
House of Representatives and the public.

"This will require leadership, but also a willingness to
consult and compromise. This we are ready to do," he said in his
speech.
Later on he told reporters the government would stick to its
plan of selling PT Semen Gresik, Semen Padang's parent company,
this year, despite the takeover.

But he added the government wanted to hear out first the
aspiration of the people of Padang before making any decisions.

Elsewhere, the IMF's Senior Advisor for the Asia Pacific
Department, Daniel Citrin said failure to sell off BCA on time
would hurt IBRA's overall revenue target.

"So to the extend that they (IBRA) don't get the money from
the BCA sale as planned, they'll have to make up for it in other
areas," Citrin told reporters on the sideline of the CGI meeting.