Government fails to meet first half privatization target
Government fails to meet first half privatization target
The Jakarta Post, Jakarta
The government is unable to meet the target for proceeds from the
first semester of privatization of around Rp 3.25 trillion
(US$346 million), as promised to the International Monetary Fund,
due to a delay in the privatization of several state-owned
enterprises (SOEs), according to a senior official.
But Mahmudin Yassin, deputy for privatization at the Office of
the State Minister of State Enterprises, expressed optimism that
the government could still raise around Rp 2 trillion in the next
two months from the sale of shares in international
telecommunications firm PT Indosat and property company PT Wisma
Nusantara.
"It will probably only be around Rp 2 trillion, obtained from
the sale of Indosat and Wisma Nusantara," he was quoted by Antara
as saying on Monday.
He said that the government had to delay the privatization of
several SOEs including pharmaceutical companies PT Indofarma and
PT Kimia Farma, port operator PT Angkasa Pura II, and coal mining
firm PT Tambang Batubara Bukit Asam because more time was needed
to complete the sale process.
He did not elaborate.
He only said that the sale of shares in Bukit Asam was due to
a new plan in which the company may form a consortium with other
SOEs to participate in the bidding for a 51 percent stake in East
Kalimantan-based coal mining giant PT Kaltim Prima Coal.
But analysts have said that growing protests against the
government privatization program and unfavorable market
conditions have contributed to the delay.
The government is targeted to raise Rp 6.5 trillion in
privatization proceeds this year in a bid to help finance the
2002 state budget deficit projected at around 2.5 percent of
gross domestic product. So far the result is zero.
During the past two years, the government has failed to meet
its privatization target, partly due to widespread protests from
employees of SOEs, politicians and members of the public.
But Mahmudin is optimistic that the 2002 privatization target
can be reached.
He said his office was currently in the process of selecting
investors for the Wisma Nusantara office building.
He said that the Japanese Mitsui Corporation, which already
owns shares in Wisma Nusantara, was willing to purchase the
government's 42 percent stake, but the price being offered fell
short of government expectation.
Reports said earlier the government wanted a price of around
Rp 400 billion.
The government is also planning to sell a 15 percent stake in
publicly listed Indosat in June through a placement, and another
30 percent in October via a strategic sale, hoping to raise
between Rp 4 trillion and Rp 5 trillion. Proceeds from the first
tranche sale is expected to reach Rp 1.7 trillion.
Mahmuddin said that Indosat is now near a deal with Germany's
Deutsche Telekom to purchase the latter's 25 percent stake in
Indonesia's second largest cellular operator PT Satelindo.
Indosat already owns a 75 percent stake in Satelindo, and the
purchase of the remaining shares should help increase the value
of Indosat prior to its privatization program.
Mahmudin said the government will sell a 50 percent stake in
Kimia Farma, but only 30 percent would be released in the first
stage. The proceeds from this sale are expected to reach Rp 400
billion.
The government has also said it will sell a 14 percent stake
in Indofarma. It initially planned to sell a controlling 51
percent stake in the company to raise around Rp 350 billion, but
later decided to shrink the size of the offering to ensure the
company would still produce cheap medicine for the poor.
The government will also sell a 49 percent stake in Angkasa
Pura II, the operator of Jakarta's Soekarno-Hatta International
Airport, hoping to raise around Rp 1.5 trillion.
The planned sale of a 35 percent stake in South Sumatra-based
Bukit Asam is also expected to rake in Rp 1.5 trillion.