BKPM to help sell assets under IBRA

The Jakarta Post, Jakarta

The Investment Coordinating Board (BKPM) signed on Friday a Memorandum of Understanding (MoU) with the office of the State Minister of State Enterprises to help in the marketing of assets held by the Indonesian Bank Restructuring Agency (IBRA).

The MoU was signed by BKPM Chairman Theo F. Toemion and State Minister of State Enterprises Laksamana Sukardi.

The latter office oversees IBRA, which holds around Rp 600 trillion (about US$60 billion) worth of assets transferred from ailing banks and indebted bank owners in the wake of the 1997 financial crisis.

IBRA is mandated to restructure and sell the assets to raise cash to help finance the state budget, which has been heavily burdened by the huge cost of bailing out troubled banks by the government. The disposal of the IBRA assets is also crucial to help accelerate the country's economic recovery.

The agency has been criticized for slow progress in selling the assets.

This year, IBRA has set a target to raise around Rp 4.2 trillion in cash from the asset sale program to help finance the 2002 state budget deficit estimated to be 2.5 percent of gross domestic product.

"BKPM will help in the sale of IBRA assets to lure investments, particularly from foreign investors, which so far has been discouraging," Theo told reporters after the MoU signing ceremony.

"With our capacity in BKPM, we can create a synergy with the state enterprises ministry to help market state assets or projects to investors," he added.

BKPM said earlier that foreign direct investment (FDI) in the first two months of this year fell by 79 percent to $489 million from $2.33 billion in the same period last year.

For 2001, FDI approvals reached $9 billion, lower than $15.42 billion in 2000.

According to the MoU document, the cooperation deal in the sale of the IBRA assets would allow BKPM to be directly involved right from the start with the planning, developing and promoting of assets or projects to be sold to investors.

Identifying assets and projects to be sold and their potential for investors, would also be part of the BKPM task, followed by gathering of and packaging of information on the assets.

After that, the dissemination of information on the assets and projects to investors will be undertaken through the media and at seminars among other forms.