Consultants to help restructure state firms
JAKARTA (JP): The government has named six foreign consultants to assist in the consolidation of the 159 state-owned companies into 10 holding companies, a senior government official said on Thursday.
Sofyan Djalil, an assistant to the State Minister of the Empowerment of State Enterprises, said the government hired McKenzie & Co., PriceWaterhouseCoopers, Boston Consulting Group, A.T. Kerney, Booz Allen & Hamilton Inc. and Ernst & Young.
"They will help us in analyzing the pluses and minuses of the holding companies," he told The Jakarta Post on the sidelines of a seminar.
Sofyan said that McKenzie would handle consolidation for the agroindustry sector, A.T. Kerney for strategic industries, PriceWaterhouseCoopers for the mining sector and Ernst & Young for forestry, paper and wood product industries.
He did not specify the assignments of Boston Consulting Group and Booz Allen & Hamilton.
They were selected from nine overseas consultants which participated in the bid.
State Minister of the Empowerment of State Enterprises Tanri Abeng has set a September target for the consolidation of the state firms into 10 holding companies.
Tanri argues the consolidation will boost the value of the companies, enhancing the government's chance of raising a larger amount of revenue from privatization.
Sofyan said the revenue from the privatization would help the government repay its foreign debt, currently estimated at about US$70 billion.
He dismissed concern that the plan to establish the holding companies would disrupt the current privatization program.
Tanri's office has targeted raising about Rp 13 trillion from privatization proceeds to help finance the 1999/2000 state budget.
Sofyan said that at the current exchange rate of about Rp 6,700 to the U.S. dollar, the target would be about $2 billion.
The government has raised $806 million in privatization proceeds so far, he added.
Sofyan was optimistic the rest of the target could be met.
He said the government would proceed with the privatization of plantation firms PT Perkebunan IV and PT Perkebunan III, international telecommunications firm PT Indosat and airport management firm PT Angkasa Pura II, which manages the Soekarno- Hatta International Airport.
He added that initial bids for Angkasa Pura II by two foreign airport management firms, one from France and the other a consortium of Schipol in the Netherlands and the British Airport Authority, were turned down.
"Their first bids were lower than our expectations, so we asked them to repeat the bids," Sofyan said. (rei)