Govt to sell three more SOEs

Govt to sell three more SOEs

The Jakarta Post, Jakarta

Less than four months away from year-end, the government
remains confident it will be able to meet its privatization
target for this year, betting on successful sales of stakes in
three large state-owned companies.

Mahmudin Yasin, a deputy to the state minister for state
enterprises, said on Wednesday the government expected to rake in
some Rp 3.7 trillion from the planned sales of stakes in Bank
Rakyat Indonesia (BRI), gas distributor Perusahaan Gas Negara
(PGN) and cement maker Indocement Tunggal Prakasa.

The government aims to receive a total of Rp 6.1 trillion from
the privatization program this year; thus far, it has collected
about Rp 2.5 trillion, which has come entirely from the sale of a
20 percent stake in Bank Mandiri through an initial public
offering (IPO).

The sale of stakes in BRI and PGN is expected to generate Rp
1.5 trillion in proceeds from each, while the sale of a 17
percent stake in Indocement is expected to bring in another Rp
700 billion.

The government has been relying heavily on proceeds from the
privatization program for years to help plug the state budget
deficit, despite the fact that the program has often sparked
strong criticism from many politicians.

The government argues that aside from providing contributions
to the state budget, the privatization program will allow state-
owned enterprises, most of which are notorious for their corrupt
culture, to perform better, to international corporate standards.

However, owing to a combination of stiff public opposition and
a lack of preparation by the government, progress on the program
has thus far remained slow.

This is evident from the government's recent decision to
revise downward the proceeds target from the program from Rp 8
trillion to Rp 6.1 trillion.

According to Minister of Finance Boediono, the government has
no choice but to scale down the target, following its failure to
sell three other state companies that had been slated for sale
this year.

They are: pharmaceutical companies Kimia Farma and Indo Farma
and airport operator Angkasa Pura II, which runs the country's
largest airport, Soekarno-Hatta International.

In 2004, the government hopes to raise Rp 10 trillion from
selling state-owned enterprises, as stated in its draft 2004
state budget.