Govt to privatize Merpati this year
Govt to privatize Merpati this year
Dadan Wijaksana, The Jakarta Post, Jakarta
The government has said it would press ahead with its plan to
privatize state-owned Merpati Nusantara Airlines this year amid
tougher competition in the airline business.
"There is no other way; the privatization has to be done as
soon as possible to help it cope with tough challenges in the
industry," State Minister for State Enterprises Laksamana Sukardi
said on Monday during a signing ceremony between Merpati and
local governments in Kalimantan.
He was commenting on recent calls to postpone Merpati's
privatization program until next year, as rising political
uncertainty during the upcoming general elections might prompt
for investors to bid low for Merpati shares.
Laksamana, however, argued that new credible investors would
make Merpati better equipped to compete with others at a time
when the global airline industry had suffered various shocks,
from the Sept. 11 attacks in the U.S. to the Iraq war, other
terrorist attacks in a number of nations including Indonesia, to
the SARS outbreak.
"That's why we need to find investors soon that are credible,
willing to inject capital into the company and to improve the
company's performance. This will, in the end, increase tax
revenues," he Laksamana said.
Merpati is among the 14 state-owned companies up for sale this
year under the government privatization program. The government
targets proceeds of Rp 5 trillion from the program to help plug
this year's budget deficit, estimated at Rp 24.4 trillion.
The number of shares to be sold has yet to be determined, but
the government would prefer to sell a majority stake so as to
bring in higher revenues. Selling a majority in Merpati would
allow the government to procure a premium fee in addition to
proceeds derived from the sale-per-share price.
Aside from Merpati, shares in the national flag carrier Garuda
Indonesia are also up for grabs.
The Monday agreement between Merpati and the four provincial
administrations in Kalimantan is aimed at setting up a new joint
airline, the Kalimantan Air Service.
The Memorandum of Understanding was signed by Merpati
president Hotasi Nababan and representatives from West, South,
Central and East Kalimantan provinces.
Under the agreement, the new airline will use Merpati planes
and flight personnel while fares would be subsidized by the local
governments. Merpati can also operate aircraft purchased by the
provinces.
The company has a fleet of 42 airplanes servicing 250 routes
and 250 daily flights.