Government told to proceed with Cemex deal

Berni K Moestafa, The Jakarta Post, Jakarta

The government should proceed with its put option deal for the sale of state-owned cement producer PT Semen Gresik to Mexico- based Cemex SA de CV, without waiting for the House of Representatives to lend its approval, a senior legislator said on Wednesday.

Chairman of the House of Representatives' Commission IX for financial affairs Benny Pasaribu said the government should not let itself be distracted by legislators opposing the sale.

"Why should it (the government) need to refer the matter to the House?" Benny told reporters before attending a meeting between the finance ministry officials and the House budget commission.

He said that only if the government asked for input from legislators would his commission review the Cemex put option deal.

"Let the government as the executive decide. We can still discuss this (put option deal) anytime they want," he said.

The government has been wavering over the sale of Semen Gresik for fear it would anger locals in the provinces of Padang and Tonasa.

Locals in both areas have rejected foreign control of two Semen Gresik units, PT Semen Padang and PT Semen Tonasa.

But with a put option right, the government is entitled to receive US$520 million for a 51 percent stake in Semen Gresik.

The proceeds would raise much needed cash to meet the government's privatization target.

Yet on top of opposition from the regions, Cemex may also retreat from a deal given that its deadline is Oct 26.

The government's bid to extend the put option deal has yet to receive any response from Cemex, according to the company.

Legislators have also raised nationalist sentiment against Cemex, warning of foreign dominance of the local cement industry.

Benny brushed aside such criticisms, saying they were individual opinions and did not reflect the House's stance.

State Minister for State Enterprises Laksamana Sukardi has said that by law the government need not seek the House's approval regarding state asset sales.

Both Benny and Laksamana are members of the Indonesian Democratic Party of Struggle (PDI-P).