The government plans to privatize 44 state companies this year, including 10 companies initially planned to be privatized last year, says a minister.
The 34 new companies include train manufacturer PT INKA through a strategic sale of 49 percent of its shares, steel producer PT Krakatau Steel through a strategic sale of 20 percent of its shares or 40 percent through an IPO, and Bank BNI through an additional divestment of 15.76 percent of its shares.
"Beside the 34 companies, the privatization program for this year will also include a carryover from the 10 companies initially planned to be privatized in 2007.
"The 10 companies include PT Garuda Indonesia, PT Merpati Nusantara Airlines and PT Industri Gelas," State Minister for State Enterprises Sofyan Djalil said during a hearing with the House of Representatives on Tuesday night.
Some House members voiced concerns over current global economic conditions, particularly turbulence in global capital markets led by the U.S. mortgage crisis.
They worried conditions were unfavorable for the privatization plan, and that the government would be unable to secure the best share prices.
Sofyan said these concern had been taken into consideration and that the government would not sell its shares in the companies if the prices were not favorable.
"If prices are low, the government will postpone the privatization. But if prices improve, we will go ahead," he said.
He said the privatization plan was crucial because it would leverage the companies' competitiveness, as well as freeing the government from non-performing assets.
Commission VI member from the Indonesian Democratic Party of Struggle, Hasto Kristanto, told The Jakarta Post on Wednesday he feared the privatization plan was aimed merely at generating money to cover the government's growing budget deficit.
The deficit has grown as Jakarta has increased subsidies to keep pace with rising commodity prices.
The government has said the budget deficit is likely to reach Rp 87.3 trillion (about US$9.3 billion) in 2008, or about 2 percent of GDP.
According to Sofyan, the government hopes to raise about Rp 1.5 trillion from the divestments. Last year, the government raised Rp 3.1 trillion from a targeted Rp 4.7 trillion through its privatization program.
"It also seems that they are in a rush to finish (the privatization) before the 2009 general elections," lawmaker Hasto said.
A capital market analyst at Bank Mandiri, Laksono Widodo, said there were too many companies being divested at once, which would make it difficult for the government considering the work involved.
"Some SOEs may need to face serious restructuring while others do not. The treatment will be energy draining and time consuming," he said.
He also said the government must have a specific control mechanism to avoid state losses and also to maintain majority ownership in SOEs which fall under strategic national interests.
State firms for sale
Company 1. Garuda Indonesia 2. Merpati Nusantara Airlines 3. Industri Gelas 4. Cambrics Primissima 5. Atmindo 6. Intirub 7. Prasadha Pamunah Limbah Industri 8. JIHD 9. Kertas Blabak 10. Kertas Basuki Rahmat 11. Asuransi Jasa Indonesia 12. Bahtera Adhiguna 13. Bank Tabungan Negara 14. Barata Indonesia 15. Djakarta Lloyd 16. Dok Perkapalan Surabaya 17. Industri Kapal Indonesia 18. Industri Kereta Api 19. Industri Sandang 20. INTI 21. Kertas Kraft Aceh 22. Krakatau Steel 23. Pengerukan Indonesia 24. PTPN III 25. PTPN IV 26. PTPN VII 27. Semen Baturaja 28. Sarana Karya 29. Virama Karya 30. Waskita Karya 31. Yodya Karya 32. Dok & Perkapalan Kodja Bahari 33. Sucofindo 34. Kawasan Berikat Nusantara 35. Surveyor Indonesia 36. Bank Negara Indonesia 37. Semen Kupang 38. Kawasan Industri Medan 39. Kawasan Industri Makassar 40. Kawasan Industri Wijaya Kusuma 41. Adhi Karya 42. Pembangunan Perumahan 43. SIER 44. Rekayasa Industri
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