Govt expects to raise Rp 15t from privatization
JAKARTA (JP): The government projects it will raise Rp 15 trillion (US$1.87 billion) from its divestment in 12 state companies during the 1998/1999 fiscal year, a senior official said yesterday.
Most of the privatization proceeds will be used to supplement the state budget, Director General of State Enterprises Bacelius Ruru added.
"The total proceeds from the share sales have yet to be determined, but I think it will be in the neighborhood Rp 15 trillion," he told reporters at a leadership forum organized by the Center for Corporate Leadership.
Ruru declined to specify which of the state companies would be put on the market first, saying that preparations were continuing, including the need to appoint a financial consultant to advise the government on the privatization process.
The criteria for selecting a consultant is currently being discussed with the World Bank, he said, adding that the decision would be made soon so that a blueprint on Indonesia's privatization scheme could be completed before the end of September.
State Minister of the Empowerment of State Enterprises Tanri Abeng announced Tuesday seven state companies to be privatized soon either through initial public offerings or private placement by inviting strategic investors.
The companies being prepared for privatization are steelmaker PT Krakatau Steel, port infrastructure and management companies PT Pelindo II and PT Pelindo III, toll road company PT Jasa Marga, palm oil plantation company PT Perkebunan Nusantara IV, coal mining company PT Batubara Bukit Asam and airport management firm PT Angkasa Pura II.
The government also will make additional divestments in five state companies already listed on stock exchanges. They are local telephone operator PT Telkom, international telecommunications firm PT Indosat, cement maker PT Semen Gresik, tin mining company PT Tambang Timah and nickel and gold mining company PT Aneka Tambang.
Ruru indicated that the proceeds from the share sales would be used mainly to help cover the 1998/1999 budget deficit, which is estimated at 3.2 percent of the gross domestic product.
The budget deficit will be generated mainly by subsidy spending on staple foods, fuel, electricity, medicines and credits for cooperatives and small and medium-sized enterprises.
Zafer Achi, who is president director of the Booz, Allen & Hamilton Jakarta office and one of the speakers in yesterday's forum, said his consulting firm was interested in being involved in Indonesia's privatization program.
Achi said his firm had substantial experience in privatization, mentioning British Airways as an example.
He added that his firm had also been appointed to advise South Korea in dealing with the country's monetary crisis. (rei)