Govt confident of increased SOEs dividends

Govt confident of increased SOEs dividends

Yuli Tri Suwarni and Urip Hudiono, The Jakarta Post, Bandung/Jakarta

With the fairly solid performance state firms have been showing
this year, the government is confident of being able to further
increase its proceeds from the firms next year, scrapping as well
the need to privatize them for the budget deficit's sake.

State Minister of State Enterprises Sugiharto said the
government was for 2006 expecting a 20 percent rise in revenues
from the dividends.

"I'm very confident that dividends from SOEs can be increased
next year, as the proceeds for this year alone have already
reached Rp 12 trillion (some US$1.2 billion) -- higher than the
previous target," he said on Monday during a breaking-of-the-fast
event at the head office of state-owned telecommunications firm
PT Telkom in Bandung.

Taking Telkom as an example, Sugiharto said the telco firm had
been putting in a strong performance -- both operationally and
financially -- already booking a net profit of Rp 3.7 trillion
during this year's first semester, and was expected to close the
year with Rp 7.4 trillion in profits, higher than last year's Rp
6.2 trillion.

Sugiharto said, however, that the exact amount of dividend
proceeds to finance next year's budget was still being discussed
with the House of Representatives.

The government has proposed a total of Rp 12.5 trillion in SOE
dividend payments and Rp 4.5 trillion from their privatization to
help finance the 2006 state budget.

For this year, the government is targeting Rp 8.9 trillion
from dividend payments and Rp 3.5 trillion from privatization.

The government is yet to realize any of its privatization
plans so far, including a plan to release a 7 percent stake in
state gas company PT Perusahaan Gas Negara (PGN) for at least Rp
1.1 trillion.

Coordinating Minister for the Economy Aburizal Bakrie has also
mentioned the government's plan to release between 5 to 8 percent
of its stake in Bank Mandiri and Bank Rakyat Indonesia (BRI).

Sounding even more optimistic, secretary at the office of the
state minister, Muhammad Said Didu, said that the government may
even be able to double its SOE dividend payment target for next
year.

"We could increase it from Rp 12 trillion to Rp 23.5
trillion," he said, mentioning dividends from Telkom and state
oil and gas firm PT Pertamina as contributing the lion's share.

Despite its frequently troubled cash flow, Pertamina may be
able to profit this year, while Telkom has undoubtedly enjoyed
growth from the recent boom of cellular phone sales in the
country.

Said further explained that such a target would not result in
additional burden for the SOEs, as the ministry had adjusted the
dividend payment ratio of each SOE according to their financial
ability and needs.

He also questioned as well the need for privatization if
budgetary requirements had already been met through dividend
proceeds.

"Privatization should be done in the paradigm of improving an
SOE's performance," he asserted, "and not merely to plug the
budget deficit."