DPR has approved Indosat sale: Minister
The Jakarta Post, Jakarta
State Minister of State Enterprises Laksamana Sukardi asserted on Saturday that the House of Representatives (DPR) had approved PT Indosat's strategic sale as part of the government's privatization program to reform public companies and help maintain fiscal sustainability.
Laksamana told the Editors Club that the privatization program itself had been mandated by the People's Consultative Assembly (MPR) in 1999 and had since been reaffirmed by the country's highest legislative body in its annual meetings.
"Law No. 25/2000 on the National Development Program also firmly stipulates privatization as a concerted effort to restructure state companies and to optimally raise revenues for the state," he said.
Moreover, he added, the Law on the 2002 State Budget stipulates privatization as a major source of revenues, setting up the program to raise a minimum of Rp 4 trillion (US$450 million) for the budget.
"It is in light of this program that my office held a series of consultations with House Commission IX (in charge of state budget, finance and state companies) deliberating which state companies would be privatized.
"These meetings were concluded on Nov. 19 with a joint statement signed by myself and the chairman and the three deputy chairmen of House Commission IX approving the sale of Indosat together with PT Tambang Batubara Bukit Asam, PT Wisma Nusantara Indonesia and PT Indofarma," Laksamana asserted.
He made the explanations in reply to the protests from several House members grouped in the Reform faction, some analysts and the Indosat employees' union, all of whom opposed the Indosat sale, arguing that the transaction would cause great losses to the state and adversely affect the country's telecommunications industry.
Singapore Technologies Telemedia (STT) won the government's 41.9 percent stake in Indosat on Dec. 15 through an open, competitive bid by paying Rp 5.6 trillion, which represented a 50.6 percent premium on Indosat's share price on the Jakarta Stock Exchange.
Laksamana rejected the critics' allegations that the transaction was not transparent, pointing out that the House and all other Indosat stakeholders had been thoroughly briefed on the step-by-step bidding process and on the great benefits the strategic sale would generate for Indosat, the telecommunications industry, the state budget and the economy in general.
"Just witness how the market has welcomed the deal, as can be noted from the strengthening of the rupiah and the bullish sentiment on the Jakarta Stock Exchange immediately after the transaction," he said.
He called on critics to come up with real evidence of corruption or collusion within the transaction.
"I always welcome constructive criticism, rational analyses and of any deal within the privatization program but please don't politicize the issue as it would only sabotage the process of regaining market confidence in the economy," Laksamana appealed.
In fact, he added, it has been his policy to have all transactions within the privatization program independently audited to ensure the transparency and accountability of every deal.
He recalled that there had been a national political consensus on privatization as far back as the early 1980s under then Soeharto's administration as one of the most effective ways of reforming state companies.
Both the government and the House saw privatization as more imperative than ever after the economic crisis to help maintain fiscal sustainability, without which even domestic investors, let alone foreign businesspeople, would not have any confidence in the economy.
"This can be concluded from the MPR annual meetings which have always stipulated privatization programs in their rulings," he said.
Laksamana reiterated that another similarly important objective of privatization was to break the cycle of corruption and collusion within state companies.
"As the minister in charge overseeing state companies, I am fully aware how these companies have become the breeding ground for corruption and collusion due to strong political pressures and intervention from senior officials and politicians and other powerful, vested interest groups."
It is no big surprise then that the powerful groups of people with vested interests in those companies are trying to sabotage the sales, because they are afraid of losing their cash cows, he said.
Laksamana categorically rejected the allegations by some politicians that privatization amounts to selling the state or sovereignty to foreigners.
"What we sell are only the shares of a state company or a claim to dividends, while the state still retains its sovereign rights to tax and direct the development of the company to meet the national economic goals through regulations on particular industries, labor, environment, etc.," he added.
He said one should not forget that when "we sell the shares of a state company, the new investors acquire the liabilities of that concern as well."
Referring back to Indosat, Laksamana said Indosat would have never been able to survive in the telecommunications industry where the technology has been developing rapidly, especially when it loses its monopoly of international call service next August, combined with the entry of state-owned PT Telkom into that service.
"By allying with STT, Indosat, which is burdened with debts will have ample, easy access to fresh capital, new technology and the global network, but its assets will remain in the country, its employees are still Indonesians and its operations are still subject to Indonesian regulations.
A strong Indosat will greatly benefit the nation as the state can collect more value added tax, income tax and dividends to finance public welfare programs, public services and facilities," Laksamana added.
All in all, Laksamana asserted, an efficient, highly competitive Indosat will greatly benefit the consumers and the whole economy as telecommunications are now one of the most important basic infrastructures.