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."