Govt's commitment to privatize state companies remains

JAKARTA (JP): Director General for State-owned Enterprises, Bacelius Ruru, asserted yesterday the government remained strongly committed to privatizing state-owned companies in a bid to improve their efficiency and strengthen their operations.

But Ruru said that only one state company -- mining firm PT Aneka Tambang -- would be floated on the stock exchanges this year as the newly created directorate of privatization under his supervision was still preparing other potential firms for initial public offerings (IPOs).

"There are many others that are being prepared, such as (state electricity firm) PLN, Krakatau Steel and (toll road operator) Jasa Marga, but at the moment it is only Aneka Tambang, scheduled for the fourth quarter," Ruru told journalists on the sidelines of an international capital market conference.

He said issues pertaining to regulatory framework were hindering the privatization of other state-owned companies, particularly those that enjoyed monopolies.

The government viewed privatization as an important tool for improving public enterprises' performance, Ruru said.

Both PLN and Jasa Marga are involved in monopolies, and the regulatory framework for these sectors would have to be settled before they could be privatized, Ruru added.

He said the government had restructured the regulatory framework of the telecommunications sector before it privatized PT Telekomunikasi Indonesia (Telkom) and PT Indonesia Satellite Corp (Indosat).

"As we prepare them for IPOs we are restructuring and streamlining the regulatory framework and that is why this year it is only Aneka Tambang (that is being listed)," Ruru said.

According to Ruru, privatization of state companies through the stock exchanges not only raise fresh funds for the issuers themselves and the government (as the shareholder) but also subject company management to market discipline.

"Our experience confirms that privatization has improved the management and operations of state companies because the listing requirements, including the tough disclosure requirements, force them to be more transparent," Ruru noted earlier at the international capital market conference.

Jakarta Stock Exchange (JSX) president Cyril Noerhadi said every entrance of state firms into the capital market would inject a fresh flood into the market.

He said five state firms currently listed on the JSX -- Indosat, Telkom, tin miner PT Tambang Timah, cement producer PT Semen Gresik and Bank Negara Indonesia 1946 -- accounted for 27 percent of the capitalization of all companies traded on the exchange.

"Floating state firms' shares through the capital market has a positive impact on the market. It gives an added value to the market," Cyril said.

"So, we hope more state firms will go public," he added. (rid/vin)