Government raises $1.04b from privatization

JAKARTA (JP): The government has raised US$1.04 billion from its privatization program in the first five months of the 1999/2000 fiscal year which ends in March.

An assistant to the state minister of the empowerment of state enterprises, Sofyan Djalil, said he was optimistic this fiscal year's target of $1.6 billion from the program would be realized.

He said the government raised $215 million from the sale of its shares in port operator Pelindo II and $173 million from Pelindo III.

Additional revenue came from the sale of $119.3 million in stock in food manufacturer PT Indofood Sukses Makmur and $409 million in PT Telkom, Sofyan said.

He also said the government received $122.1 million from the sale of 14 percent of cement manufacturer PT Semen Gresik to Mexican cement company Cemex SA.

Sofyan added that after the privatization, Semen Gresik would export 3 million tons of cement in 1999, compared to 1.8 million tons last year.

He said the role of Cemex SA as a strategic partner in Semen Gresik helped open new export markets for the company, and it was expected that its exports would further increase to eight tons per year.

Last fiscal year's privatization proceeds only stood at about $380 million, falling far short of the $1 billion target.

Sofyan promised to announce by early next month whether the planned consolidation of 144 state firms into 10 holding companies was going forward.

The government named six foreign consultants in early August to assist in analyzing the advantages and disadvantages of the planned consolidation.

The foreign consultants are McKenzie & Co., PriceWaterhouseCoopers, Boston Consulting Group, A.T. Kerney, Booz Allen & Hamilton Inc. and Ernst & Young.

In the near future, the government also plans to sell some of its shares in state airport operator Angkasa Pura II and state plantation company PT Perkebunan IV, Sofyan said.

"We are now in the final stages of negotiations with foreign investors to privatize the two state firms," he said.

Sofyan added that other state companies to be privatized by the government within this fiscal year were fertilizer manufacturers PT Pupuk Kaltim and PT Pusri, plantation company PT Perkebunan III and international-call operator PT Indosat. (udi)