Dadan Wijaksana The Jakarta Post Jakarta
The government is banking on the sale of more than 14 state- owned firms this year to meet a Rp 5 trillion (US$580 million) target from privatization proceeds, a deputy minister said on Wednesday.
Deputy to the State Minister for State Enterprises Mahmuddin Yasin said the companies would be sold through various schemes, such as private placement to strategic investors, initial public offerings (IPOs), and secondary public offerings. The last two involve selling stakes at the stock market.
Mahmuddin however did not provide the timeframe for the sale of each company, nor the size of the stake in the companies to be put on offer, reported Dow Jones.
The government is relying on proceeds from the privatization program to help cover the state budget deficit, which for this year has been set at Rp 24.4 trillion or 1.2 percent of the country's gross domestic product (GDP).
Aside from contributing to the budget, the privatization program will help develop transparency, efficiency and professionalism in state-owned enterprises, most of which have been criticized for their inefficiency and corrupt culture.
In terms of proceeds, last year was a successful year for the privatization program.
Through the program, the government managed to rake in Rp 7.4 trillion, surpassing an initial target of Rp 6.2 trillion. The proceeds came from the sales of stakes in four state companies, that is Bank Mandiri (20 percent), Bank Rakyat Indonesia (40.5 percent), cement maker Indocement (16.9 percent) and natural gas distribution company Perusahaan Gas Negara (39 percent).
Nevertheless, a combination of stiff public opposition, sometimes driven by vested interests, and a lack of preparation on the part of the government has often put the program at the center of fierce debates, stalling the progress in a number of sale programs.
Elsewhere, Mahmuddin said that the companies to be sold this year include pharmaceutical companies Kimia Farma and Indo Farma, where a majority stake will be sold through private placement to strategic investors.
IPOs are planned for fertilizer producer Pupuk Kaltim, state plantation firms PT Perkebunan Nusantara III, IV and V.
Shares of gold and nickel producer Aneka Tambang, tin producer Timah, coal producer Batubara Bukit Asam, Mandiri and BRI, will also be offered through secondary market offerings.
Also to be put on offer are shares in national flag carrier Garuda Indonesia, airline operator Merpati Nusantara, port operators Angkasa Pura II (Soekarno-Hatta International Airport) and Angkasa Pura I (Salaparang).
Other smaller firms on offer are Adhi Karya, Iglas and Intirub.
For this year, privatization proceeds is becoming a more important source of revenue for the government in the future, particularly as the country is no longer eligible to certain financing facilities from the Paris Club of creditor nations after the International Monetary Fund (IMF) ended its special lending program here by the end of last year.